What don’t homeowners stop foreclosure with irrevocable trust fund?
October 20th, 2008 | by bpac |JWD asked:
Is it possible to transfer the title to a irrevocable trust fund if you are in threat of foreclosure? I don’t own a home, just wonder if it’s an realistic plan for people who have lost their jobs and are therefore losing their homes to foreclosure? Thanks.
KIRBY
Is it possible to transfer the title to a irrevocable trust fund if you are in threat of foreclosure? I don’t own a home, just wonder if it’s an realistic plan for people who have lost their jobs and are therefore losing their homes to foreclosure? Thanks.
KIRBY
2 Responses to “What don’t homeowners stop foreclosure with irrevocable trust fund?”
By Laura KC on Oct 23, 2008 | Reply
First, you can’t transfer title to the house while you have a loan against it as that would allow the bank to demand immediate payoff in full. And then you’ve just accelerated the foreclosure process. Second, even if the house were held in a trust, that would not impact the bank’s right to foreclose. All that would happen is that any money left after the house is sold and the loan is satisfied would go into the trust.
By Dark Dragon on Oct 24, 2008 | Reply
In a title theory state, No, you don’t own the title until you pay off the mortgage.
In a lien theory state, Yes, you can, but it does nothing. The mortgage (and thereby the note) follow the property regardless of the owner. Transferring the property does not remove the mortgage from the property. Therefore the mortgage can still be foreclosed on the property.