Maddox & Gerock


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February 2012 Archives

Divorce, Mortgage Issues, and Avoiding the Due-on-Sale Clause

With the state of America's current housing market, people who are in the process of obtaining a divorce frequently have additional issues to consider if they are still paying a mortgage to include the "due-on-sale" clause often found in mortgage documents. The due-on-sale clause in connection with a mortgage may allow the lender to demand payment of the remaining balance of the mortgage when the property is sold or transferred without the lender's prior written consent. However, the Garn-St. Germaine Depository Institutions Act ("Garn Act"), codified at PL 97-320, 1982 HR 6267 (October 15, 1982), enables people to avoid triggering the due-on-sale clause in their mortgage if they meet one of the nine exceptions set forth in the Garn Act, regardless of what the contract states. Below are the exceptions that are of particular interest to people involved in a divorce proceeding:

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Maddox & Gerock, P.C.
8111 Gatehouse Road
Suite 410
Falls Church, VA 22042
Phone: 703-883-8035
Fax: 703-356-6120
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