Due On Sale Clause: Myth or Fact?

[Bryan Rodriguez]

BP Fellows, When utilizing the Assignment of Mortgage Payments (AMP) or Subject To strategies, is it realistic that a Lender will call the note? If so, can someone provide a testimonial about it. In addition, if a Lender does call the note then can the Buyer just refinance with a WRAP Mortgage? Please, elaborate and add whatever respective comments to further understand the application of the AMP and Subject To strategies. Thank you!

[Jon Holdman]

IMHO, if you're going to buy subject to (which I do not) this is NOT the correct strategy. If you're buying subject to you should be prepared to deal with a loan call by paying off the loan. Period. Refinance, get private or hard money, leverage another property, something. As far as the seller's concerned they've sold you the house. Now you say "sorry, I need to return this house." That would be devastating to many sellers. You bought it. In buying subject to you assume the risk of getting the loan called. Its your responsibility, IMHO, to mitigate that risk if it happens. If you're unwilling or unable to deal with that risk, don't buy subject to.