Loan Modification Agreement and EHT

[rickParticipant]

I was reading a Loan Modification Agreement from Nationstar and ran into this information.

Heading: In consideration of the mutual promises and agreements exchanged, the parties hereto agree as follows (notwithstanding anything to the contrary contained in the Note or Security Instrument)

1. Amount unpaid
2. New terms
3. Failure to Timely Payments

4. If all or any part of the Property or any interest in the Property is sold or transfered (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without the Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by the Security Instrument.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums prior to the expiration of this period, Lender may invoke any remedies permitted by the Security Instrument without further notice or demand on Borrower.

After I looked at #4 of the modification I realized what it said. If the property is placed in the EHT, it is not sold or transferred under the law.

Any comments?

[mtnwizard49Member]

Rick,

It ALWAYS says or is supposed to say “if legal under applicable law”. All notes and loan agreements usually say that. They can’t put in a term that violates Federal law.

Here it says: Lender may invoke any remedies permitted by the Security Instrument without further notice or demand on Borrower. The Security Agreement does not permit it.

[bill_gattenParticipant]

Nope. Sorry Doc.

The Cognitive Rigidity trap here is: “If borrower is not natural person.” In other words if the borrower IS a natural person (not a fictitious or business entity) then notification of the lender of the vesting of the property into an inter vivos trust is not mandatory in order to avoid the DOSC.

With any property over 4 units, one would, however, have to notify the lender and get their acquiescence, as Garn-St. Germaine relates only to 4 units and less..

The phraseology you’re referring to is in FHA documentation and does say “unless prohibited by applicable law.”

Bill

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