[WSBAPT] Garn-St. Germain Act

[Douglas Bratt]

Listmates:

 

Please confirm my understanding of Garn-St. Germain, viz-a-viz the bar on
enforcement of due-on-sale clauses in certain real property loans.

 

The act states that the bar on enforcement of due-on-sale clauses extends
to “a real property loan secured by a lien on residential real property
containing less than five dwelling units.”

 

My understanding has been that this applies to both a owner-occupied
residence AND to rental property (with less than five units) owned by the
Decedent.

 

A major US national bank has made noises about trying to get paid off on a
loan on residential rental property, owned in the sole name of the
Decedent  (the surviving spouse is not mentioned on title).  The bank
filed a Creditor’s Claim in the Decedent’s Probate case, and was even nice
enough to provide a “Payoff Statement,” with a figure good through June
13, 2014.

 

Have any of you had any situations where banks try to enforce due-on-sale
clauses on rental property with similar tactics, within a probate
proceeding?

 

Insofar as a response, I am inclined to prepare and file a Denial of
Creditor’s Claim, stating that the debt will be assumed by the Decedent’s
wife, with the real property to remain the security for the loan, and
mention Garn-St.Germain, along with a statutory citation.  Any other
suggestions, legal, practical or otherwise?  

 

Best Regards,

 

Doug Bratt

 

Douglas J. Bratt

Lawyer

 

 

 

Office: (360) 213-2040 

 Fax: (360) 213-2030

 

 

 

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