You must be logged in to reply to this topic.
-
Jurgen,
I’ve never refinanced a property so I don’t know for sure, but it is my understanding that you would have to take the property out of a trust to refinance it. You should talk to a mortgage broker about how to handle it.
I don’ t think there is anyway that the TRUSTEE for the trust can refinance.
Lending has tightened up so much that I don’t think you can do it.
the bigger questions is WHY would you want to refinance?
If you need money and there is a substantial equity in the property, maybe it would be better to direct the trustee to sell an option for part of the equity. Or you could sell one of the other “rights” in the property. Listen to Jack’s Title, Bundle of Rights audio for other ideas.
With the seller of the property being one of the beneficiaries, I would think you would need to get their approval before you can do anything. It all depends on how the TRust document is written.
Jackie
Jackie
This has been my primary business in CA since 1990.
Essentially, conventional lenders don’t underwrite loans whereby the real property is vested in the name of a trust. I’m sure that a loan occassionally gets thru that the borrower is also the settlor and trustee of a revocable trust that they’re also the beneficiary of, but that is rare.
The biggest hurdles are that no two trusts are likely to be identical, nor are the terms, since there are many different types of trust vehicles. Most banks are not chartered to make such loans, and mortgage bankers who resell their originated loans are unprepared to review the lengthy trust documents to confirm capacity and powers of the trustee(s) and beneficial interest(s), if even disclosed.
Another issue is that trustees, when acting in purely fiduciary capacities, have no personal liability (at least in my State) and this is contrary to wishes of most lenders.
That leaves portfolio and private lenders. About their only repayment recovery recourse is the protective equity for the loan, which means that trust borrowers have a more difficult time using financial leverage.
Also, since they cannot easily resell these loans on the secondary market (at least not in any bulk quantity) it’s a low volume business.
Probably more than you wanted to know (or hear) but that’s why we’ve carved out a small niche many years ago. I might mention that we primarily serve clients referred by probate attorneys and you’ve got to enjoy the relationship as they drive most would-be competitors crazy.
Rick the Probate Guy
Jurgen:
I have a number of conventional loans with banks. The properties are all in Land Trusts. They required a copy of the Trust. The big point is that I had to sign for the loan personally. They will not allow a Trustee to sign as per comments of your last guy from California.
If you can qualify personally for the loan and are willing to sign personally, I would be willing to bet they will allow it to be in a Land Trust.Don Wede
You must be logged in to reply to this topic.
