Does the transfer to a land trust violate the “due on sale” clause?

The Garn – St Germain Depository Institutions Act of 1982 specifically allows property owners to place property into a land trust without triggering the due-on-sale clause. That means that property owners can transfer mortgaged property to a land trust without interference from the bank. This is the case as long as the borrower remains a beneficiary, the property consists of fewer than five dwelling units, the trust is revocable and does not convey rights of occupancy to others. The bank does not typically verify who the beneficiary of the land trust is or who is occupying the property and therefore investors can benefit greatly from using a land trust.