Due-on-Sale Clauses. Simple clause:. “If borrower sells the Property without Lender’s consent, Lender may, at its option require immediate payment in full of all sums secured by this mortgage.” (Why is this optional with the lender?). Fannie Mae-Freddie Mac Clause 18, page 1214.
At the other extreme of the interest cycle: The 11th District cost of funds index dropped below 2% in 2004!
Is a lender who waits too long (after getting notice of the transfer) estopped to accelerate?
May the lender accelerate and also charge a prepayment fee?
Must the lender release the original borrower when the lender approves a transfer of the property?
A lender waives its option to exercise a due-on-sale clause if the lender and grantee agree in writing that the grantee will be obligated under the terms of the loan. ... Upon such agreement, a lender shall release the existing borrower.
Does the borrower have a duty to notify the lender of a transfer?
How might the lender discover the transfer?
What remedies might the lender assert?
Is concealment unethical if an attorney assists?
Is concealment smart?
Transfers of ownership shares in the entity (usually an LLC):
Among family members
Among related entities
Try to think through likely transfers before signing the loan documents.