transfer property with due on sale illegal?

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Hi, ther, I have a mortgage on my property, its 5 years down the line, and now that I will be shifting, I'd like to transfer my property to one of my relatives. But my mortgage has due on sale clause. Is it illegal to transfer ownership rights inspite of this clause?Do I have to pay off totally if i do so. I am confused and the lender is out of state, can't contact within a few weeks. Any help will be appreciated.

Caron

Hi Sharone,

It's not illegal if you transfer the title to the property even though there's a Due-on-Sale clause associated with your mortgage. It is not a violation of a criminal law after all. And, there's no federal or state law which states that violating the clause is a crime.

What the clause actually implies is that, the lender will demand for repayment of the outstanding loan balance if he discovers that you have transferred to the property secured by the due-on-sale mortgage. In case you fail to pay it off, the lender has the option of initiating foreclosure.

Thanks,

Caron.

jerry · Posted: Tue May 23, 2006 2:52 am Post subject: RE:

Hi,

You can very well sell off your property or transfer its title to some other person though your mortgage has the due on sale clause.

Know more on due-on-sale from our section on this clause.

Thanks,
jerry.

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