Quit Claim the Title on a Commercial Loan?

[Luke Carl]

Didn't get around to putting together an LLC in time on this deal in a new state.

Is a commercial loan the same as a Fanny/Freddy where they can call the loan if you quit claim to an LLC or does the bank not care?

Should I push back closing and re-do title work or just quit claim later?

I didn’t want to ask the bank and poke the bear. Or should I ask them?

Thanks!

[Rusty N.]

My banker (multiple freddie mac mtgs) said to do it and just not tell him about it.  Could you imagine the cumbersome job of checking county title records every year on every piece of collateral a bank has?  I have not and will not do it. 

The bank I work at (different than above) would never outright give permission on this.  Commercial or otherwise.  If they give permission to break one covenant or clause in the loan agreement, they fear a judge could throw out the whole thing.  Again, we would never trigger a due on sale clause for the sake of triggering it.  We would look the other way unless there were additional problems. 

FWIW Fannie Mae allows this now. Has to close in personal name or trust, but can be xferred to LLC owned by original signer.