Required wait after property purchase before transferring to LLC?

[Kaushal M.]

Hello,

I purchased a property in our personal names (my wife and I) about 1.5 months back. But shortly after, I decided to open an LLC, and that process is done.

The lender does not have any issue with transferring the property to LLC (e.g. does not need us to refinance, etc.), but the only requirement they have is that we wait until our loan gets taken up by Fannie Mae or someone, before we transfer the property to our LLC.

It's has been over a month, and apparently our loan isn't yet bought by Fannie Mae, because our lender is still asking us to wait.

Question: Is anyone aware of why this requirement could have been put in place? Now that my LLC is formed, I just want to transfer the property and be done with it. I don't know how much longer I'll need to wait.

Thanks!

[Russell Brazil]

Basically your lender is saying, its someone elses problem after the loan gets sold. You still should not transfer it to an LLC as the new lender will have the ability to call your loan due when you do.

Most lenders do not find out because most people do not do it properly. The lender is typically notified when you cancel your old insurance policy and get a new one with the LLC reflected as the new owner and insured. But, most people never do that, thus, the lender never finds out. However, that in essence means the property is not insures at all since the actual owner of the property, the llc, is not insured.

It also makes the LLC a complete moot point as it will be pierced in 10 seconds with the loan in 1 persons name, and the property owned by someone else, piercing that corporate veil.

99% of people attempting to limit their liability do the complete opposite and 10x their liability.