SB1452: Conveyance or assumption; certain restrictions prohibited.

Legislative Summary

Certain restrictions on conveyance or assumption; prohibited. Prohibits the holder of the obligation secured by a mortgage or deed of trust on certain residential real estate from imposing, agreeing to, or enforcing a legal restriction on conveyance or restriction on the assumption of a residential mortgage or deed of trust. The bill requires a holder, if a mortgage or deed of trust requires approval of the holder for a conveyance or assumption, to approve the sale or transfer of all or part of the encumbered property, or the sale or transfer of a beneficial interest in a trust all or part of the property, if (i) at least one of the people acquiring ownership is determined to be creditworthy under generally accepted mortgage underwriting standards; (ii) the seller retains an ownership interest in the property; or (iii) the transfer is by devise or descent. The bill provides that legal restrictions on conveyance are acceptable if the restriction is part of an eligible governmental or nonprofit program if the program is designed to assist the purchase of low-income or moderate-income housing.