Bank insists on seeing Trust Agreement - Posted by Ben (FL)

Posted by Lynn Hahn on October 24, 2000 at 22:30:36:

We use trusts all of the time and we have never had a bank ask for a copy, but I don’t see what it would hurt. Do you have a specific reason for not wanting them to see it, or is it just a matter of principle? :slight_smile:

Happy Investing!
Lynn Hahn

Bank insists on seeing Trust Agreement - Posted by Ben (FL)

Posted by Ben (FL) on October 24, 2000 at 18:59:41:

Same bank, different loan officer: I bought two other houses, earlier this year, using the same bank (they loan 80% of the appraised value, so if I get a ocntract on a property for 80% or less than what it appraiseres for…$0 down). They agreed to record the mortgage in the name of the trustee as long as I signed a personal guarantee for the note. Well, now for some reason, the new loan officer insists that he must see the entire trust agreement before financing the purchase. Id he entitled to see it? Or is it just a matter of - he can do what he wants, and if I don’t want to play, then I don’t play?

Re: Bank insists on seeing Trust Agreement - Posted by dewCO

Posted by dewCO on October 25, 2000 at 22:20:18:

Would you please share the name and 800 number of the bank that does these loans. Wow, didn’t know anyone did this any more. Hope they lend out of state!!!

How many points and roughtly what interest rate too, please.

So what’s the problem? - Posted by Bud Branstetter

Posted by Bud Branstetter on October 25, 2000 at 09:51:38:

The property is in your name, it is a standard land trust and you personally are signing the note. He is not going to learn anything new.

What you do with the beneficial interest later, he will not know about. If you do it in a PACtrust you won’t even be violating his due on sale clause.

Yes, you should not be in a property for more than 80%(if that much). Getting quick financing is great but eventually he will not want the exposure of you having too many loans in your name. If you are doing it part time probably not a problem. Start full time and you will dry him up. Definately establish that relationship but also establish a relationship with B/C lenders so that you can get some of these people to qualified or refi’d on their own.

Re: Bank insists on seeing Trust Agreement - Posted by AndrewC

Posted by AndrewC on October 25, 2000 at 06:51:05:

I believe that officially you cannot divulge the Trust
information / agreement without the written consent of the beneficiaries, or a court order.
Also, as Trustee, you are not allowed to sign personally on any debt instrument concerning the property. That in itself , would be silly for a Trustee to be personally liable for a beneficiaries obligations. What would happen if the benficiary fired the Trustee, you would still be liable , since you had signed a personal guarantee. Now, you may be able to get away with signing it “AS Trustee”.
Best thing to do , 1) read the entire agreement , it should have something pointing this out; 2) always consult an attorney.
Now, if you are the beneficary, then its not a big deal. But you cannot legally obligate yourself or the beneficary without written consent from the beneficiary.

Andrew Colvin

I am not an attorney. This is my opinion. Consult an attorney.