[WSBAPT] Garn-St. Germain Act

Tue May 20 14:32:06 PDT 2014

I believe that the act is pretty clear that to be a qualified transferee,
the person receiving the property from the deceased must occupy or plan to
occupy the property and be a relative.

So no, I don’t think the church will qualify.

Heather

Heather S. de Vrieze
Attorney-at-Law

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Seattle, WA 98116-3705                          

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From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of jeffrey winter
Sent: Tuesday, May 20, 2014 2:24 PM
To: wsbapt at lists.wsbarppt.com
Subject: RE: [WSBAPT] Garn-St. Germain Act

As long as we are on the subject, is there any reason to believe that the
exemption for transfers by "devise, descent and operation of law" would
not apply if the devisee were a charitable institution (e.g., a church)?
In other words, could the lender assert due on sale because the borrower
died and left the mortgaged property to a church (assuming payments
continued to be made thereafter by the church)?

Jeffrey D. Winter

Law Office of Jeffrey D. Winter, P.S.
604 North Main Street
Ellensburg, WA 98926
(509) 925-9600 tel.
(509) 925-9606 fax

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Date: Tue, 20 May 2014 21:11:39 +0000
From: sullaw at comcast.net
To: wsbapt at lists.wsbarppt.com
Subject: Re: [WSBAPT] Garn-St. Germain Act

Douglas:

The "residential" aspect of the defined term requires the property to be
owner occupied to fall within the exemption. There is no prohibition
against exercising a due on sale clause on a non-decedent occupied rental
property that passes to the surviving spouse. This is clearer in the
regulations than in the statute itself.

http://www.law.cornell.edu/cfr/text/12/591.5

Best regards, 
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ATTORNEY

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From: "Douglas Bratt" <djbratt at mbavancouverlaw.com>
To: wsbapt at lists.wsbarppt.com
Sent: Tuesday, May 20, 2014 12:50:49 PM
Subject: [WSBAPT]  Garn-St. Germain Act

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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