Learn More - Click Here!

Thread Options
#1933853 - 06/18/14 09:25 PM Deed in LLC - Borrower/Sole member lives in house
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,563
Ohio
Senerio - Property in the name of a LLC. LLC signed mortgage and borrower signed the Note personally (he lives in the property). Loan documents were done as in Investment Property using a Cognovit Note. I think I have two problems - 1) the loan was for a consumer purpose, therefore in Ohio, a Cognovit Note would have been prohibited and 2) we should have given the borrower a ROR.

Any thoughts?

Return to Top
#1940269 - 07/12/14 12:17 PM Re: Deed in LLC - Borrower/Sole member lives in house jlroberts
bgehres Offline
100 Club
Joined: Mar 2005
Posts: 126
If your only borrower is the owner of the LLC (natural person) and not the LLC itself, I think that's a problem with the judgement clause. See ORC 2323.13(E)1 - it defines consumer.

Since the LLC is the owner and not considered a consumer, rescission wouldn't be applicable. We have a lot of loans where the house is deeded to the borrower's trust and have had no issues not giving rescission since the owner is not a natural person.

Return to Top