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RE Taipan · Sep 6th, 2007, 08:37 PM

I'd like to get some ideas on this one....as a way to accomplish what you are trying to do yet avoid the DOS clause...

Assume that Mary Owner has a SFR located at 123 Main St, Anytown USA. Owner wants out of the property

Draft a loan agreement with Mary whereby you loan Owner a sum of money on a promissory note which is secured by a TD on the property. Record the mortgage. Of course, you will be in a Jr position to the original mortgage holder (and possibly the 2nd mort holder too).

Owner of course defaults on your mortgage and to protect your security interest in the loan, you move to foreclose giving proper notice to Owner. Owner gives you a Deed in Lieu of Forclosure to avoid the foreclosure. You record the deed and transfer the property into a land trust called, in this case, the MO 123 Main St., Land Trust with yourself as trustee.

This gives you 2 options:

Option 1: You notify the 1st mortgage holder that you are taking over the loan, under the same terms as the original holder pursuant to the original terms pursuant to the Garn-St. Germain Federal Depositary Institutions Act of 1982 (12 U.S.C. 1701-j) and keep making payments to the lender. Note: While Garn-St Germain codified the enforceabliity of DOS clause notwithstanding any local jurisdictional court precedent to the contrary, it also carved out some exceptions where the DOS clause cannot be enforced including the one applicable here --- the creation of a subordinate security instrument not related to the transfer of the subject property.

Option 2: Say nothing to the lender and continue to make payments to the lender from the land trust checking account.

Next, offer the SFR to a buyer on the typical easy close, no qual basis with the option to buy for $X00,000.00 at anytime during the next Y years under an Assignment of Deed. Charge them K% down @ a rate and payment in excess of the original mortgage to give you cash flow. At the time they execute the Assignment, they also excecute a Quitclaim Deed.

Since they have bought the purchase option on the property, they are not renters, but "owners" in that they are responsibile for all repairs, property taxes, etc. If they default on the payment, you file the quitclaim and retake the property and relist to a new owner.

--Good?
--Bad?
--Insane?

....you guys are the experts (or at least more knowledgeable that I am)

Thank you in advance for your feedback on this!

Sep 6th, 2007, 08:37 PM	#13 (permalink)
RE Taipan Level: (12) Chevrolet Joined: Aug 2007 Locale: Balboa Island, CA Posts: 41 Thanks: 0 Thanked 0 Times in 0 Posts	Re: Acquire SFR without Financing I'd like to get some ideas on this one....as a way to accomplish what you are trying to do yet avoid the DOS clause... Assume that Mary Owner has a SFR located at 123 Main St, Anytown USA. Owner wants out of the property Draft a loan agreement with Mary whereby you loan Owner a sum of money on a promissory note which is secured by a TD on the property. Record the mortgage. Of course, you will be in a Jr position to the original mortgage holder (and possibly the 2nd mort holder too). Owner of course defaults on your mortgage and to protect your security interest in the loan, you move to foreclose giving proper notice to Owner. Owner gives you a Deed in Lieu of Forclosure to avoid the foreclosure. You record the deed and transfer the property into a land trust called, in this case, the MO 123 Main St., Land Trust with yourself as trustee. This gives you 2 options: Option 1: You notify the 1st mortgage holder that you are taking over the loan, under the same terms as the original holder pursuant to the original terms pursuant to the Garn-St. Germain Federal Depositary Institutions Act of 1982 (12 U.S.C. 1701-j) and keep making payments to the lender. Note: While Garn-St Germain codified the enforceabliity of DOS clause notwithstanding any local jurisdictional court precedent to the contrary, it also carved out some exceptions where the DOS clause cannot be enforced including the one applicable here --- the creation of a subordinate security instrument not related to the transfer of the subject property. Option 2: Say nothing to the lender and continue to make payments to the lender from the land trust checking account. Next, offer the SFR to a buyer on the typical easy close, no qual basis with the option to buy for $X00,000.00 at anytime during the next Y years under an Assignment of Deed. Charge them K% down @ a rate and payment in excess of the original mortgage to give you cash flow. At the time they execute the Assignment, they also excecute a Quitclaim Deed. Since they have bought the purchase option on the property, they are not renters, but "owners" in that they are responsibile for all repairs, property taxes, etc. If they default on the payment, you file the quitclaim and retake the property and relist to a new owner. --Good? --Bad? --Insane? ....you guys are the experts (or at least more knowledgeable that I am) Thank you in advance for your feedback on this!