Contract for Deed

[JMM1979]

I have a questions about something that is on a deed. We are considering doing a contract for deed but was unsure if this was possible. After looking into the Acceleration Clause on the deed and seeing an addendum added we are confused if this would trigger the due on sale. Can anyone offer any insight?

 

This is what the referenced part (paragraph 9b) says on the deed:

 

"9. Grounds for Acceleration of Debt

 

b. Sale without Credit Approval

 

Lender shall, if permitted by applicable law (including Section 341 (d) of the Garn. St. Germain Depository Institutions Act of 1982, 12 USC 1701j3-(d) and with the prior approval of the secretary, require immediate payment in full of all sums secured by this security instrument if :

 

(i) All or part of the property or a beneficial interest in a trust owning all or part of the property is sold or otherwise transferred (other than by devise or descent) and

 

(ii) The property is not occupied by the purchaser or grante as his or her principal residence or the purchaser or grantee as his or her principal residence, or the purchaserof grantee does so occupy the propery but his or her credit has not been appproved in accordance with the requirements of the secretary.

 

On the Non-owner occupany rider form that was signed there was an addendum added stating that

 

B. Lender shall not require immediate payment in full, not withstanding the provisions of paragraph 9 b of the security instrument, soley because all or part of the property or a beneficial interest in a trust owning all or part of the property is sold or otherwise transferred.

 

Does this mean that owner financing or a contract for deed can be done without triggering the acceleration policy or due on sale?

[SaltyTX]

That is the purpose of the rider to supersede the previous paragraph. Are you going to cut a check for the mortgage and then pay a portion to the seller? If not, you have

very little recourse if the seller/land lord doesn't pay the mortgage.

 

I'd be careful w/ a contract for deed.

[JMM1979]

That is the purpose of the rider to supersede the previous paragraph. Are you going to cut a check for the mortgage and then pay a portion to the seller? If not, you have

very little recourse if the seller/land lord doesn't pay the mortgage.

 

I'd be careful w/ a contract for deed.

 

When you say supersede do you mean that a contract for land can be done without triggering the due on sale clause? We will be getting an attorney to draft up all the paperwork and to make sure we are both covered but trying to find out if its even possible to do. We personally know the sellers and have lived here for 3 yrs no problem. They have been great landlords.