I’m in Texas and my mortgage broker is telling me that most lenders don’t care about deeding the property over to my LLC if I use a Warranty Deed Subject to Debt and listing the mortgage holder as the debtor.
Legally, I’m sure this still triggers the DOS, but I’m pretty sure the bank doesn’t want the property back… again… and having another document that says the property is subject to their lien can’t hurt them if you ask me…
If the property is already secured by the mortgage you gave the lender to collateralize your loan, then transferring title to your LLC has no affect upon the lender’s lien.
Whether you use a warranty deed or a warranty deed subject to debt does not seem to make a difference. The lender’s lien is still intact.
Regardless of the deed form used, transferring title from yourself to the LLC triggers the DOSC which gives the lender the right to call your loan due. Most lenders probably won’t bother as long as the loan stays current.
Don’t ask the lender if you can transfer. They will most likely say no. If they find out, chances are they will let the LLC assume the loan with your personal guarentee for a small fee. Another option that I see used more frequently is to transfer the title to a land trust and then assign the beneficial interest to the LLC. This method keeps the transfer to the LLC private. In any case, make sure your insurance information is accurate. Most people name the LLC as an additional insured if they don’t use some kind of trust.
More and more lenders will loan to the LLC directly with a personal guarentee and the terms are not that much worse than a personal mortgage. This method also keeps your name out of the public record.