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<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">Rob,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">In the early 1980’s it would have happened in a heartbeat, because we were going from low interest rates 6-7% (which was low then) to high interest rates (18-21%). The Due on Sale clause came into
being because so many people were selling property with loans that were initiated in the 60’s and 70's on wrap contracts because lender’s generally used FHA DOT Form had no due on sale clause. Banks wised up quickly and inserted the due on sale provision
in about 1979 or 1980. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">Because interest rates are low, and not fluctuating much, banks will not have a lot of incentive to start a foreclosure just because a borrower sells the property on a wrap contract without a formal
assumption of the loan - provided the new buyer continues to pay. Remember, if the subsequent buyer fails to pay, the bank can (and probably will) go after the original borrower for any deficiency judgment. If we get into a high interest environment, you
can bet banks will take notice and start enforcing their due on sale provisions if a borrower is crazy enough to sell on a wrap contract.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue">I have had the situation where a client requested written consent from the lender (big bank) to their transfer their property into their revocable living trust, and received a denial.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
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<p class="MsoNormal"><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne</span></i><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><i><span style="font-size:18.0pt;font-family:"TypoUpright BT";color:blue">Jeanne J.</span></i></b><b><i><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue">
</span></i></b><b><i><span style="font-size:18.0pt;font-family:"Bella Donna";color:blue">Dawes<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">Attorney at Law</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">Gore & Grewe, P.S.</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">103 E. Indiana Avenue, Suite A</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">Spokane, WA 99207-2317</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">Voice: 509-326-7500</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">Fax: 509-326-7503</span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue"><a href="mailto:jjdawes@goregrewe.com">jjdawes@goregrewe.com</a></span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue"><o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto"><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue">INFORMATION CONTAINED IN THIS E-MAIL TRANSMISSION IS PRIVILEGED AND CONFIDENTIAL. </span><span style="font-size:12.0pt;font-family:"Times New Roman","serif";color:blue">
</span><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:blue"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;color:blue"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Tom J. Westbrook<br>
<b>Sent:</b> Tuesday, February 03, 2015 3:08 PM<br>
<b>To:</b> WSBA Real Property Listserv<br>
<b>Subject:</b> Re: [WSBARP] [WSBAPT] Due on Sales Clause and transfers to trust<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Hi Rob,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Never seen it myself. Advised clients for many years of the possibility. I remember a posting and email thread about this a few months back and don’t recall anyone having actually
seen it happen just because of the transfer itself. Love to hear about 1 or more just to know it will really happen.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Tom<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Thomas J. Westbrook<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Attorney at Law<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#44546A"><img border="0" width="170" height="67" id="Picture_x0020_3" src="cid:image001.jpg@01D03FC4.97AFB8C0" alt="cid:image001.jpg@01CFC835.0D3988D0"></span><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Rodgers, Kee & Card<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">324 West Bay Drive NW, Suite 201<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Olympia, Washington 98502<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Phone: 360-352-8311<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Facsimile: 360-352-8501<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Email:
<a href="mailto:tjw@buddbaylaw.com">tjw@buddbaylaw.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A">Skype: thomas.westbrook<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><a href="http://www.buddbaylaw.com">www.buddbaylaw.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Arial","sans-serif";color:#44546A">The information contained in this email and attachment(s) are for the exclusive use of the addressee(s) and may contain private, privileged and/or confidential
information. If you are not the addressee, you are strictly prohibited from reading, photocopying, distributing or otherwise using this email or its contents in any way. If you have received this communication in error, please notify us immediately by telephone
at 360-352-8311 or by e-mail to <a href="mailto:reception@buddbaylaw.com">reception@buddbaylaw.com</a>, and destroy the original message from your electronic files.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#44546A"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">mailto:wsbarp-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Rob Rowley<br>
<b>Sent:</b> Tuesday, February 03, 2015 8:49 AM<br>
<b>To:</b> WSBA RPPT<br>
<b>Subject:</b> Re: [WSBARP] [WSBAPT] Due on Sales Clause and transfers to trust<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">This is more of a survey question for the wise minds that inhabit this listserv.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">How many practitioners have actually seen a large bank (Wells Fargo/Bank of America, etc…) call a note on a breach of the ‘due on sale’ provision on a sale ‘subject to’?
A wrapped note transaction. I have never seen one.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">Obviously, a whole different answer when dealing with a small local bank/credit union or commercial loans. I have seen that situation as the bank officers are far more aggressive.
Likewise, these small lenders are far more likely to file a judicial foreclosure and seek a deficiency versus the large banks.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">When I am counseling my clients I'm always very mindful to remind them of the due on sale provision and where necessary obtain a written document advising the clients of
the risks on buying a property ‘subject to’ which I tuck away in my file.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">When I argued my sole case to the Supreme Court (Bank One vs Alby (2005)), which had lots of issues one of the very tangential issues dealt with restraints on alienation
and due on sale provisions. Not at issue in that case, but I've always been interested in the topic.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">Thank you.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><!--[if gte vml 1]><v:shapetype id="_x0000_t75" coordsize="21600,21600" o:spt="75" o:preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f">
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</v:shape><![endif]--><![if !vml]><img width="69" height="104" src="cid:image004.jpg@01D03FC4.97AFB8C0" align="left" hspace="10" v:shapes="_x0000_s1026"><![endif]><b><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Robert
R. Rowley</span></b><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D"> | Attorney at Law</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">505 W. Riverside Ave, Suite 500</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Spokane, WA 99201</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Telephone: (509) 252-5074</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Mobile: (509) 994-1143</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Facsimile: (509) 928-3084</span><o:p></o:p></p>
<p class="MsoNormal" style="line-height:12.0pt"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Email:
</span><span style="color:#1F497D"><a href="mailto:rob@rowleylegal.com"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">rob@rowleylegal.com</span></a></span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Times New Roman","serif";color:#1F497D">Web Site:
</span><span style="color:#1F497D"><a href="http://www.rowleylegal.com/"><span style="font-size:10.0pt;font-family:"Times New Roman","serif"">www.rowleylegal.com</span></a></span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> [mailto:<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Jennifer Y. Sohn<br>
<b>Sent:</b> Monday, February 02, 2015 4:32 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv'<br>
<b>Subject:</b> Re: [WSBAPT] Due on Sales Clause and transfers to trust</span><o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Sure, and based on my experience, most commercial banks will work with you to make this work. With fannie mae loans, I found that the approval/review fee can be quite hefty. In any case, for non-residential,
I would advise the client (in writing) to get a prior waiver and the risks of not getting one. </span><o:p></o:p></p>
<p class="MsoNormal"><a name="_MailEndCompose"></a><span style="color:#1F497D"> </span><o:p></o:p></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Lovie Bernardi<br>
<b>Sent:</b> Monday, February 2, 2015 3:04 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> Re: [WSBAPT] Due on Sales Clause and transfers to trust<o:p></o:p></p>
</div>
</div>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Thanks, Jennifer. That was my thought as well on the lack of occupancy. I found an unreported federal case that ruled against the bank on that issue, but it seems like a risk. I like your suggestion on the transfer
on death deed, Kate, especially if the banks are unwilling to approve the transfer.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Jennifer Y. Sohn<br>
<b>Sent:</b> Monday, February 02, 2015 2:31 PM<br>
<b>To:</b> 'WSBA Probate & Trust Listserv'<br>
<b>Subject:</b> Re: [WSBAPT] Due on Sales Clause and transfers to trust</span><o:p></o:p></p>
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<p class="MsoNormal"><span style="color:#1F497D">I would review the deed of trust and any other loan documents. My experience has been that most commercial banks (including Chase) doesn’t care too much, or will approve the transfer upon request, but I recently
had a lender (a fannie mae loan) call a loan for transferring assets to an RLT. If there are more than 1 properties I would presume the non-residence property will not fall under the (d)(8) exception.</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">
wsbapt-bounces@lists.wsbarppt.com</a> [<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">mailto:wsbapt-bounces@lists.wsbarppt.com</a>]
<b>On Behalf Of </b>Lovie Bernardi<br>
<b>Sent:</b> Monday, February 2, 2015 1:54 PM<br>
<b>To:</b> <a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a><br>
<b>Subject:</b> [WSBAPT] Due on Sales Clause and transfers to trust<o:p></o:p></p>
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<p class="MsoNormal">Dear listmates:<o:p></o:p></p>
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<p class="MsoNormal">I have a client whose wife passed away. The couple owned multiple properties in Idaho and Washington, most with substantial mortgages. The wife had been living in Washington for medical treatment for many years when she passed away while
the husband lived in Idaho most of the time. We filed a probate here in King County and an ancillary probate is being handled by an attorney in Idaho. The will instructed the PR (husband) to place the wife’s portion of the community property in a living trust
that was established before her death. She died before any of the property was transferred to the trust, hence the two probates. Interestingly, the trust did not become irrevocable upon the death of the wife.<o:p></o:p></p>
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<p class="MsoNormal">The husband wants to transfer both his wife’s interest and his interest in the properties to the trust, in order to avoid a double probate at the time of his own death. (He will probably still be an Idaho resident.) My concern is whether
the transfer will trigger the due on sale clauses in the mortgages. Most of the mortgages are with Chase. I have reviewed the exemptions from the due on sale clause under 12 USCS Section 1701j-3(d). The transfer of the wife’s interest falls under exemption
(d)(3) (“a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by entirely”). But does the husband’s transfer of his interest fit under (d)(8) (“a transfer into an inter vivos trust in which the borrower is and remains
a beneficiary and which does not relate to the transfer of rights of occupancy”)?<o:p></o:p></p>
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<p class="MsoNormal">Am I safe to transfer both the wife’s interest and the husband’s interest in the properties without triggering the due on sale clause? I attended a trust CLE last August which suggested the transfer of real estate to a trust during lifetime
might trigger the due on sale clause. Does anyone have experience with this issue and/or suggestions for me? Thank you in advance for your input.<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Lovie Bernardi</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Attorney at Law</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Seligmann & Flaherty, PLLC</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">216 First AVE S, #450</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Seattle, WA 98104</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">(206) 682-2616</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Arial","sans-serif""> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif""><a href="mailto:joni@sbfirm.com">lovie@sbfirm.com</a></span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif""><a href="http://sbfirm.com/">http://sbfirm.com</a></span><o:p></o:p></p>
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