10-09-2013 01:55 PM - edited 10-09-2013 01:56 PM
A bit OT, but I hope not too badly, and that someone on this board knows the answer.
I'm considering transferring ownership of my home into an LLC, of which I would be the administrator. The property is subject to a mortgage, originated by USAA, currently owned by Fannie Mae, and serviced by Ocwen. I understand that one of these outfits would have to approve the transfer, but I can't get a straight story as to which one is empowered to grant (or refuse) such an approval. Is there any general statement that would apply to this situation. Thanks.
10-09-2013 02:32 PM
How long ago did you buy it?
Freddie Mac has a restriction on transfers/sales within X months of closing on a purchase of a Freddie Mac f/c'ed property. The penalty is Y. On most of the contracts I have seen it is a 6 month restriction and a $10,000 penalty. But your area could be different. Look at your contract, the Freddie Mac addendum and it is specified in the addendum. Same with Fannie Mae if others are reading this. BTW, this penalty applies even if you paid cash for the property. It is a deed restriction.
Check your mortgage and your note to see the restriction about transferring into an LLC. I am not sure if the mortgage and note you signed prohibits any transfers or not. You are better off speaking to a real estate attorney about this transfer anyway. Bring all your documentation (contract, closing docs and copy of your note and mortgage) Don't attempt this transfer without an attorney anyway to prepare the LLC and the deed.
If you transfer into your own trust, that would be a different answer. You still would want to speak an attorney.
10-09-2013 10:25 PM
Thanks for responding. I bought the property in 2003, refinanced in August 2010. I am working with an attorney for setting up the LLC, and she asked me to ask the holder of the note if they would approve the transfer into the LLC. I suppose I should ask her my question, but hoped to get a broader input here (and run up fewer billable hours). I'd also be interested in how a trust would be different.
10-10-2013 05:03 AM - edited 10-10-2013 06:38 AM
You have had the property 10 years so it is a non-issue with Freddie Mac. I am glad to hear you are working with an attorney and not doing it yourself, you will save yourself many headaches down the road.
To check with your note holder you have to go through your servicer and Ocwen is not really known for being cooperative at all. Remember the servicer is your contact. The servicer may or may not own your note. It is more common for the servicer to NOT own your note, but just to service the loan.
A trust is different if you are the trustee as the servicer/note holder can't stop your transfer into a trust and you don't need permission from the note holder. This is a common move with estate planning. Naturally your attorney can give you the legal ramafications and details for your specific area.
10-16-2013 10:18 PM
Thanks. I'll update when I find out more ...