Transfering Mortgage to LLC

[James Hughes]

Guys,

I own two rental properties and I have a mortgage on both of them with the same lender. I wanted to Quit Claim the property into my LLC but I ran into a roadblock. When I contacted my mortgage servicer they told me if I transferred ownership to my LLC it would trigger the "Due on Sale Clause" and would call the loan to be paid in full. Does anyone have any advice on how I can get past this?

James

[Mike S.]

@James Hughes

First of all do not use a quit claim deed as you may loose title insurance, use a warranty or special warranty deed instead.

Second, you could deed the property to a land trust where you are the beneficiary. The Garn st Germain act will protect you against a due on sale clause. Then you could assign the beneficial interest to the LLC. This assignment is not recorded.