Wells Fargo won't allow us to place property in LLC

[Tim Wilderbeeste]

As some of you may recall I made some inquiries on here a few months ago about the best way to protect our real estate holdings by placing them in an LLC. Well we consulted a lawyer and began the process through him only to run into a major hurdle - we have been instructed by Wells Fargo, the lender on three of our properties, that we are not allowed to place the properties in an LLC and if we try to do so they will trigger the due on sale clause. The lawyer said he is mystified by their stance and has never come across such a problem before - we ourselves have always found Wells Fargo very easy to deal with up to this point. Now we either have to try and refinance with someone else who'll allow the transfer to an LLC, or take up the lawyer's other recommendation of simply getting an umbrella insurance policy to cover the properties. Personally I don't get it - I thought placing investment properties in LLC's was a stock standard business practice in Real Estate, so why is Wells Fargo getting so obstructive about it - does it leave them exposed somehow? Also please note - the LLC's are purely for liability purposes, not for any kind of tax breaks.