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<p class="MsoNormal"><span style="color:#1F497D">Generally, the Garn-St. Germain Act exempts such transactions from being a violation of the due on sale clause.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN">12 U.S. Code § 1701j–3<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(d)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">
<b>Exemption of specified transfers or dispositions </b><o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on
the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_1"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(1)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> the creation of
a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_2"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(2)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> the creation of
a purchase money security interest for household appliances; <o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_3"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(3)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> a transfer by devise,
descent, or operation of law on the death of a joint tenant or tenant by the entirety;
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_4"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(4)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> the granting of
a leasehold interest of three years or less not containing an option to purchase;
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_5"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(5)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> a transfer to a
relative resulting from the death of a borrower; <o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_6"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(6)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> a transfer where
the spouse or children of the borrower become an owner of the property; <o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_7"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">(7)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">
a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;</span><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_8"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(8)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> a transfer into
an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_9"></a><b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333">(9)</span></b><span lang="EN" style="font-size:10.0pt;font-family:"Helvetica","sans-serif";color:#333333"> any other transfer
or disposition described in regulations prescribed by the Federal Home Loan Bank Board.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="color:#1F497D">Wendy Walter</span></b><span style="color:#1F497D">
</span><span style="font-size:10.0pt;color:#1F497D">|</span><span style="color:#002060">
</span><span style="font-size:9.0pt;color:#777777">Partner - Pacific Northwest<i>
</i></span><span style="font-size:10.0pt;color:#777777">| Member State Bars of WA and OR<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Times New Roman","serif";color:#1F497D">McCarthy
</span><span style="font-family:"Times New Roman","serif";color:red">♦</span><span style="font-family:"Times New Roman","serif";color:#1F497D"> Holthus LLP<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> m. 108 1<sup>st</sup> Ave. S., Suite 300, Seattle, WA 98104
</span><span style="color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> d. 206.596.4844 | f. 206.780.6862 | c. 425.241.5459<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"> e. </span><span style="color:#1F497D"><a href="mailto:wwalter@mccarthyholthus.com"><span style="color:#1F497D">wwalter@mccarthyholthus.com</span></a></span><u><span style="color:#1F497D"><o:p></o:p></span></u></p>
<p class="MsoNormal" align="center" style="text-align:center"><span style="color:#1F497D">Arizona
</span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">California </span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">Colorado </span><span style="font-family:"Arial","sans-serif";color:red">♦
</span><span style="font-family:"Arial","sans-serif";color:#1F497D"> </span><span style="color:#1F497D">Idaho
</span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="color:#1F497D"> Nevada
</span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">New Mexico </span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">Oregon </span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">Texas </span><span style="font-family:"Arial","sans-serif";color:red">♦</span><span style="font-family:"Arial","sans-serif";color:#1F497D">
</span><span style="color:#1F497D">Washington<o:p></o:p></span></p>
<p class="MsoNormal" style="mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;text-align:justify">
<span style="font-size:7.5pt;color:gray">CONFIDENTIALITY NOTICE: The information contained herein may be privileged and protected by the attorney/client and/or other privilege. It is confidential in nature and intended for use by the intended addressee only.
If you are not the intended recipient, you are hereby expressly prohibited from dissemination distribution, copy or any use whatsoever of this transmission and its contents. If you receive this transmission in error, please reply or call the sender and arrangements
will be made to retrieve the originals from you at no charge.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:7.5pt;color:red">Federal law requires us to advise you that communication with our office could be interpreted as an attempt to collect a debt and that any information obtained will be used for that purpose.</span><span style="color:red"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><a name="_MailEndCompose"><span style="color:#1F497D"><o:p> </o:p></span></a></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>Douglas W. Scott<br>
<b>Sent:</b> Friday, October 28, 2016 3:11 PM<br>
<b>To:</b> WSBA Real Property Listserv (wsbarp@lists.wsbarppt.com)<br>
<b>Subject:</b> [WSBARP] due on sale clause<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Note and deed of trust to my client are signed by debtors husband and wife encumbering their home. Note is due in December 2017 or the earlier date of sale, refinance or transfer. Husband and wife divorced and husband quit claimed the house
to the wife. Wife has filed for chapter 13 bankruptcy. Question: is the quit claim to the wife a sale or transfer triggering the Note being due?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif"">Douglas W. Scott<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Law Offices of Douglas W. Scott<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif"">Windermere Building<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif"">1810 15th Place NW, Suite 203<br>
Issaquah, Washington, 98027<br>
V. 425.392.8550<br>
F. 425-392-2829 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial","sans-serif""><a href="http://www.davisscottlaw.com/">www.davisscottlaw.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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