Video Summary
What is the due on sale clause? This is a clause that is found in almost every residential mortgage, particularly if it’s from a lending institution, a bank, or whoever gives you a 30-year fixed trade mortgage, and is in almost all even owner financing mortgages. And it says that if you transfer the property that you have a mortgage that you mortgage, then the loan, the mortgage secures, becomes due and payable and you must pay that loan off. In other words, it’s non assumable. You can’t let some buyer just take over your payments because it becomes due and payable. So that’s where they get the due on sale clause is really a due on transfer clause. Now, I will say that with the commercial lenders that if, or the regular residential mortgages, if you transfer the property, they have not been, I’ve seen very few of them that have called the loan due and payable if the mortgage payments have been being made. If they get their payments, they haven’t been enforcing the due on sale clause in commercial mortgages. I don’t know that you’ll have that kind of luck, but that is what a due on sale clause is. I’m getting ready to file two foreclosure actions, and that’s not only did it not make the payments, they also transferred the property. So that’s a default under the mortgage and we’re accelerating the amount of money owed. Under the note, if you have any questions, give me a call at (727) 847-2288.