HELLO EVERYONE
HOW WOULD I GO BY FINDING OUT IF IT IS LEGAL OR ILLEGAL TO DO LAND TRUSTS FOR THE SOLE PURPOSE OF SUBJECT TO IN THE STATE OF GEORGIA?
I PRESUME ALL STATES HAVE THEIR OWN LAWS ON SUJECT TO PROCEDURES WITHOUT LAND TRUSTS TOO?
ANY HELP WOULD BE GREATLY APPRECIATED.
THANKS,
DAN
Land Trust are legal in GA, there is a code in the Georgia Annotated, but I don’t remember the number. I will get the information and pass it on to you.
Thank You all
Geargia Code Annotated 53-12-50 and 53-12-59. BTW, a note on Atlanta Metro investing (don’t know if it pertains to you). Mortgage Loan Fraud and inflated appraisals are running rampant. Lenders and law enforcement are cracking down and ordering multiple appraisals or discounting the appraisal by a certain percentage to combat the problem. A few bad apples…
Regards,
Dave
Dave,
Someone asks if Land Trusts are legal in GA and you post about Fraud, must be some connection there with certain Land Trust’s for you to mention it.
I did read about one person’s Land Trust and the states are using an example of what it is used for to pass anti-creative investor laws, probably the one you are referring to.
John $Cash$ Locke
No connection to land trusts at all, just a valid observation of the mortgage loan fraud currently happening within the Atlanta Market that is negatively affecting any form of financing, even conventional purchases.
BTW, I believe the case you’re referring to was in NC but if it wasn’t, I’d appreciate if you could shoot the link for my study. Many thanks,
Regards,
Dave
I am wondering what mortgage loan fraud and inflated appraisals have to do with the original posters question about whether land trusts are legal in his state.
It was an aside/friendly word of warning that may pertain to his particular market. I came way too close to getting burned on an Atlanta property last October that was appraised 30% higher than what my high comps showed. Of course, it was supposed to be at 65% LTV but ended up being 130%. Don’t you think that tidbit of info may be relevant to a fellow investor?
Dave
Knowing your market and due dilligence takes care of that, regardless of what market you are in. You have to have a general idea of values in your area. That piece of advice was given to be by multiple people and I think it might be the most important thing to know with regards to investing in any area. Knowing the area…as you did in your example, is why you were able to find out the appraisal was off. That is true no matter what market you are in.
Bobo are you the moderator of this group, if you don’t like the information being passed on, go to another subject. I am in georgia, but deployed overseas at the moment, so the information was helpful to me. Since I am not there right now to do my “Due Diligence” it will give me something to look at when I return.
Excuse me, but you do not have to be a moderator to give an opinion…and you do not be a moderator to disagree with someone.
And to use your own words, if you don’t like my opinions, don’t read them. But don’t tell me I can’t give them just because you don’t agree with what I said. My comment was not directed to you in the first place anyways, so move on, because I refuse to get in a pissing match with anyone here. Your post to me was out of line.
And by the way, mortgage fraud and inflated appraisals are happening all over the US.
Buying a property sub to is illegal. NO matter where you are its illegal unless you have an assumbale loan. Using fancy ways of transferring a title to a land trust in the name of the homeowner. That is still considered transferring title, because you are in fact transferring the title into a trust. This can be investigated. If the title was not put into trust at the time the mortgage was created it is illegal. Will the lender try and burn you for a subject to? No one knows. Will they have grounds, of course so.
"Of course, last but not least, the DOS (acceleration clause). As most everyone is aware this is an option the lender has and is not in the realm of criminal activity, but would leave open certain civil court liabilities.
However, I have found no case law that would suggest the lender calling the loan due pressing any other issue."
John $Cash$ Locke
“There is absolutely NOTHING illegal, immoral or unethical about buying property subject to. Banks began using “due on sale” clauses in their mortgages in the 80’s when interest rates rose significantly and homebuyers were assuming lower rate mortgages instead of obtaining the higher rate, new loans. The due on sale clause gives banks the right, at their option, to call the loan due upon transfer of title or beneficial interest in the property with a few exceptions such as transferring title into a land trust for estate planning purposes. With today’s interest rates, the likelihood of any bank calling a performing loan due would be in my opinion miniscule.”
William Tingle
CharlottePlayer, everything that I have read says nothing about the subject to being illegal. To my knowledge there is no legislation or statutes that state that this practice is illegal. I thought that this was something created by the lending industry to give themselves the option to call loans due in times of rising interest rates.
IMO this will be even less likely that lenders will trigger the DOSC with the increasing number of foreclosures coupled with the consecutive string of fed tightenings that is most likely coming to an end.
Garn-St. Germain Act
DUE-ON SALE CLAUSES
Sec. 341. // 12 USC 1701j-3. // (a) For the purpose of this section–,
(d) A lender may not exercise its option pursuant to a due-on-sale clause upon–,
(1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
(2) the creation of a purchase money security interest for household appliances;
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
(4) the granting of a leasehold interest of three years or less not containing an option to purchase;
(5) a transfer to a relative resulting from the death of a borrower;
(6) a transfer where the spouse or children of the borrower become an owner of the property;
(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or…
CharlottePlayer,
An exerpt from the act.
“If borrower sells the property without lender’s prior written consent, lender may at its option require immediate payment in full of all sums secured by this mortgage.”
I see nothing in the act that makes it illegal for a seller to sell their property using the Subject To method only that the lender “may” call the loan due. They even say “without prior written consent” so if you get written consent then the loan would not be called. This is not that hard to do and if someone really has a problem in their mind, just get consent from the lender.
John $Cash$ Locke
Prove it. They are trying to make subject 2’s illegal in NC, NOT in Georgia or anywhere else at this point. You can legally place your property into a land trust ANYTIME you want. There is nothing in the law that says it must be placed there at the time the mortgage was created. NOTHING. In fact this is protected under Federal law as posted above by David. Please don’t just throw out blank statements with nothing to support them. ALL loans are assumable when using a land trust.
As a matter of fact, when interest rates climb and foreclosures soar, subject 2’s and land trusts will become even more useful and necessary.
So how many of you guys that buy a house subject to let the homeowner keep their interest in the property? How many of you guys let the homeowner stay in the house? So what you guys are saying is that once you buy the subject to, the owner stays part owner and the owner remains in the house. I thought with a subject to the owner also transfers occupancy rights as well. That seems like fraud or evading the lender to me. Just dont make the homeowner upset because he will have recourse. That loophole will stand up in court. oops i mean criminal court.
“ALL loans are assumable when using a land trust.”
I’m not quite agreeing with that statement, Gary. I would restate it to read
“all loans have the effect of becoming assumable using a properly crafted land trust.”
Not all trusts have that effect, IMO.
Regards,
Dave
Charlotteplayer, You are right. The trust does NOT relate to a transfer of rights of occupancy in the property. It only relates to a transfer of legal and equitable title to my Trustee and is therefore legal under this act.
By the way, the Seller ALWAYS remains a beneficiary throughout the life of the trust and does not transfer title to the property until he/she has their mortgage paid off and receives ALL their existing equity as agreed to at the time of the deal. The Seller may or may not remain in the home depending upon circumstances.
Again, what is your agenda since you are so hell-bent to try to make landtrusts and subject 2’s illegal when they are not?