First, you might want an atty. that understands trusts to answer this
one.
That said, find a different lender that understands trusts, they won’t
care if it is in a trust but will require you to sign as trustee and also
personally. I just closed a loan like that (as the trustee/borrower).
Question, who are the beneficial interest holders, and have they
directed you to borrow this money? If not, you really really want to talk
to an attorney. This is not legal advice, of course, just the opinion of a
recovering mechanic.
Situation: Applied for a 20% LTV loan on a property that I am the trustee,(There are two other beneficiaries). We are just a couple of days from closing the loan and the lender comes back with asking me to transfer the property out of the trust for a couple of days then transferring it back after the loan is completed. Questions are;1.Would I need to get the other beneficaries approval? 2. Would doing this be considered co-mingling funds? 3. Won’t this cause the property to be reappraised by the county/city? 4. What is the reason for doing this, and finally is this legal?
no. the trustee is the only person who has authority to transfer trust assets.
no. the property will be in your name for a couple of days. lenders do this all the time.
no. this would not constitite a change in ownership under California law. no reassessment and no transfer tax.
4a. For home mortgage loans, banks prefer to lend directly to individuals. I had a banker explain it to me 15 years ago, and i have long since forgotten what it was. something about their foreclosure remedies being impaired with a trust as borrower.
4b. yes. its legal.
CAVEAT: you say there are three beneficiaries. Please elaborate. Is this a living trust you set up for yourself? Is this trust irrevocable? if so, I would want to reconsider my answers.