Can someone tell me what this means *due on sale*

[Mitch6079]

We live in NC and are researching doing a contract for deed. I have read about it possibly triggering a due on sale if we were to do this so I read over our deed to see what it says. We signed an non-owner occupancy rider form. This is a house that we use as a rental b/c we live in another house.

"Lender shall not require immediate payment in full notwithstanding the provisions of the security instrument solely because all or part of the propery or a beneficial interest in a trust owning all or part of the propery is sold or otherwise transferred"

Does this mean we can do an owner finance or contract for deed without triggering the due on sale clause? We do still have a mortgage on the house.

Any help would be appreciated!

 

[nextwife]

What does the referenced security instrument say? Have you read the note thoroughly?

 

[Mitch6079]

What does the referenced security instrument say? Have you read the note thoroughly?

This is what the referenced part says:

"9. Grounds for Acceleration of Debt

(b) Sale without Credit Approval

Lender shall, if permitted by applicable law (including Section 341 (d) of the Garn. St. Germain Depository Institutions Act of 1982, 12 USC 1701j3-(d) and with the prior approval of the secretary, require immediate payment in full of all sums secured by this security instrument if :

(i) All or part of the property or a beneficial interest in a trust owning all or part of the property is sold or otherwise transferred (other than by devise or descent) and

(ii) The property is not occupied by the purchaser or grante as his or her principal residence or the purchaser or grantee as his or her principal residence, or the purchaserof grantee does so occupy the propery but his or her credit has not been appproved in accordance with the requirements of the secretary.

So my question was that on the Non-owner occupany rider form we signed there was an addendum added stating that

B. Lender shall not require immediate payment in full, not withstanding the provisions of paragraph 9 (b) of the security instrument, soley because all or part of the property or a beneficial interest in a trust owning all or part of the property is sold or otherwise transferred.

Does this mean I could do owner financing or contract for deed without triggering the acceleration policy or due on sale?

Any help would be appreciated!

 

[FarmerJ]

Mitch many CD sellers do not want the buyer to freely re sell the property , I bought my first home on a CD from a elderly couple, If I were to re sell the property I would have had to either pay them off first or set it up so they were at closing if they wanted to continue the CD with a new buyer. BUT you know having a atty review the contract to make sure you are able to absentee own or to help you renegotiate it if possible would be well worth every penny of the money spent, buying real estate either regular mortgage with a bank or CD from seller it doesnt matter , its best to have your interest looked after and having a atty assist you with buying a CD property is one way to protect your interest.

 

[Mitch6079]

I know, I plan on retaining an attorney if the COD is possible. Thats why I asked my original question. I think it means that I can do a COD w/o worrying about acceleration but wanted to make sure before I spent money on an attorney to tell me its not possible.