The Due on Sale clause is a non-issue and here’s why. There isn’t a single lender on the face of the earth that is going to enforce their Due-on-Sale rights on a mortgage that is performing (being paid on time). Why? Because lenders are in the business to make money. If they enforce their DOS clause, they are essentially taking back possession of a property in order to sell it, more than likely for a huge loss. Furthermore, lenders will only enforce their DOS clause for one reason, if the payments are late. Guess what? If the payments are late the bank is going to foreclose, not enforce their DOS clause.
Remember, there is no Due-on-Sale jail!!
It is important to note that when you take a property subject to you are making a legal and ethical commitment with the homeowner. If you begin to collect rents on the property and fail to pay their mortgage it is not only unethical, it is fraud in the state of North Carolina. This is called equity skimming and in North Carolina is punishable by up to 5 years in jail and up to a $250,000 fine. Forget the fact that it is illegal, it is unethical and takes advantage of people who are already down on their luck.
NEVER take a deed subject to if you do not intent to keep making the monthly payments ON TIME.
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