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Attyadvisor
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 5677
Experience:  28 years of experience in General Practice, Real Estate Law and Estate Law.
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The house is in my name the lien is not i have made the

Customer Question

the house is in my name the lien is not i have made the payments for 12 years on time the person on the lien wants it paid off can he demand i pay it off or is it the bank that needs to call in the loan
Submitted: 5 months ago.
Category: Real Estate Law
Expert:  Attyadvisor replied 5 months ago.

Welcome to JA and thank you for your question. I am an Arizona licensed Attorney and it will be my pleasure to assist you.

Just to clarify the situation. You are on the title /deed to the house and there is a loan recorded as a lien against the house and you are not a named borrower on the loan. Is that correct. Are you the only person in title? Who is the borrower on the loan? The loan is with a bank or mortgage company? Is that correct?

Expert:  Attyadvisor replied 5 months ago.

Are you online with me?

Expert:  Attyadvisor replied 5 months ago.

If the bank holds the loan you are correct that they would need to call the loan and if they are being paid there is no reason for them to call the loan. My only question is if he is on the title as well. I am trying to figure out his interest in the property since he only appears to be a borrower.

Expert:  Attyadvisor replied 5 months ago.

He has the obligation with the bank not you. And since you have been paying the bank would be unlikely to have reason to call the loan as they are getting paid. Was he ever on title? The only reason I ask is that if title to a property changes from the time the loan was closed there are acceleration clauses/due on sale or transfer clauses that are rarely if ever enforced that can call a loan due and payable upon the transfer title.

"Due on Sale

The mortgage documents signed by the borrower at the closing of a sale or refinance often include a due-on-sale clause which states the entire loan is due and payable if the borrower transfers the property to someone else. When the original borrower dies and leaves the house, upon which a loan is secured, to a beneficiary, ownership is legally transferred. If the due-on-sale clause is included in the mortgage or refinance agreement, you might be required to either pay off the mortgage or sell the property.

Exceptions

Federal law, specifically the Garn-St. Germain Depository Institutions Act of 1982, allows an exception to the due-on-sale clause when a property transfers by inheritance. The law allows a close relative who inherits property to assume payments on the mortgage and retain ownership of the property. A joint tenant, who shares title to the house, may also assume the mortgage; the most common situation involves a surviving spouse who still lives in the residence. If the property is inherited by a non-relative, the mortgage lender may still be able to enforce the due-on-sale clause. In practice, lenders often allow anyone capable of making payments to keep the property and simply assume the mortgage." http://info.legalzoom.com/happens-inherit-property-mortgage-23807.html

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