There is no "Due on Sale" Jail

There is no DUE ON SALE Jail

 

A great legal scholar, friend and mentor of mine, William Bronchick wrote a great article, years ago addressing the due on sale clause.   Find that here. 

The Due on Sale Clause, aka The Acceleration Clause, written into most mortgages (post 1982), says they have the right to call the loan due, but not the obligation, if the title is transferred and the loan is not paid off.    

There is a lot of case law, cited in Bill's article, where under certain circumstances lenders can not call the loan due (immediately due and payable). 

Great news.  This means we can buy a house using and leveraging the existing the financing.   We follow best practices given the legal rights granted in laws like the Garn St. Germain Act. 

Anytime a seller says "I can't sell my house because my lender won't allow it", I will refer them to this blog posting.\, and Bill's great article, find that here.