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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72" style='word-wrap:break-word'><div class=WordSection1><p class=MsoNormal>Hello listmates,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Hypothetical clients (HC) are about to take out a loan secured by property that is not their residence. The property is currently in their living trust. The lender is proposing to move the property out of the trust, close the loan, then move the property back into the trust. There is a risk that the lender could take the position that the transfer back into the trust violates the due on sale clause because this is not HC’s residence. The lender refuses to add anything custom to the loan docs on this issue. HC wants to go ahead because even if the lender took that position at some time in the future, worst case scenario HC could pay off the loan. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I’m curious if anyone has ever experienced any issues with this type of a situation in real life and if so, how it was resolved. It seems like this issue should come up from time to time but perhaps it doesn’t. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Thank you, <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span lang=EN style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Mimi M. Wagner <o:p></o:p></span></p><p class=MsoNormal><span lang=EN style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'>Attorney at Law<br><a href="mailto:mimi@sanjuanlaw.com"><span style='color:blue'>mimi@sanjuanlaw.com</span></a><br>Phone (360) 378-6234<br>Fax (360) 378-6244<br></span><span style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'><a href="http://www.sanjuanlaw.com/"><span lang=EN style='color:blue'>www.sanjuanlaw.com</span></a></span><span lang=EN style='font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;color:#1F497D'>This email is sent by a law office and contains information that may be privileged and confidential, or protected by the work product doctrine. </span><span lang=EN style='font-size:10.0pt;color:#1F497D'>If you believe that it has been sent to you in error, do not read it. Please notify the sender that you have received the message in error, and then delete it. To comply with IRS rules, we must tell you that if this message contains advice relating to federal taxes, that advice was not intended to be used, and cannot be used, for avoiding penalties that may be imposed under federal tax law. </span><span style='font-size:10.0pt;color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>