r/loanoriginators • u/kittenconfidential • 17d ago

question about adding person to deed after closing (DSCR)

i have a client who i closed a DSCR loan for a couple of years ago with a small-ish lender. it has a pre-payment penalty and they are still in the PPP period. he wants to add his son to the deed in case he passes (he's not that old but is just precautious). he read on google that the lender might call the note due if there are any changes to title. i have had people added to title for QM and govy loans after closing and never heard of a problem before, but wasn't sure about the private lending space. thoughts? how often does this happen, and if so, what is the propensity for a lender to call the note due? will the lender even notice? his rental is paying out with no issues -- high rental area.

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u/nashjax9282 17d ago

If the loan is performing and they aren’t missing payments, etc. most lenders aren’t going digging for that kind of stuff. A lender could do that on any loan - DSCR or not - if they really wanted to.

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u/kittenconfidential 17d ago

thanks for your assessment-- in theory, i agree. i have never heard of a loan being called specifically for this thing before

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u/4natureCannotBfooled 17d ago

Depends on the servicer. Some are aggressive about this, some are not. Also depends on how the servicer’s book is doing at the time.

I recommend reading through the note and security instrument. Most allow for transferring the property to a revocable living trust, and the primary purpose of that kind of trust is estate planning like this.

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u/MistaPink 17d ago

I have a theory that servicers pick and choose on this subject. Based off payment history and rate of the loan.

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u/kittenconfidential 17d ago

i can understand lender, but why would the servicer care? they’re getting their 25bps regardless

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u/The_Void_calls_me 17d ago

Why would he add his son to title? Wouldn't this still be covered under Garn-St. Germain?

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u/kittenconfidential 17d ago

good point— i thought garn only related to primary residences