My concern is that my trust will have to pay off a loan that I have refinanced on a property where I am in joint tenancy? Does the survivor from joint tenancy on a property become responsible for the refinanced loan?
The loan is repaid by the remaining joint tenant according to its terms. The law prevents the lender from calling the loan due pursuant to a due-on-sale clause, provided the loan is secured by a lien on residential real property containing less than 5 units.
See, Garn-St. Germain Depository Institutions Regulation Act, 12 U.S. Code § 1701j–3 - Preemption of due-on-sale prohibitions
“(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety….”
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