In regards to carryback sellers and all-inclusive trust deeds (AITDs), since AITDs have a due-on clause, and AITDs wrapping first trust deeds cannot be done without bank approval, isn’t the point moot?
All trust deeds have a due-on clause, unless it is deliberately written out of the contract, in which case it is obviously assumable. However, trust deeds with due-on clauses are also assumable, WITH lender consent. In rising markets, lenders are less inclined to consent, but in the current market place, with new financing difficult to obtain and lenders wishing to avoid eating the loan, they are more willing to consent to an assumption. Regardless of whether the seller carries back a regular 2nd trust deed or an AITD, you always need lender consent when a due-on clause exists. It should not be “assumed” that just because a trust deed includes a due-on clause that the lender would not consent and hence the loan would not be assumable. You can and should always ask the lender; it won’t hurt, but it can help.