Posted by Ray S on November 26, 2004 at 22:00:39:
Hi Dave. I had a similar experience with my bank. What about Faxing the Attorney and asking him how he would change it to protect his client and still retain the Trust. It may not be that big of deal. If it is you can allways Go back and forth a couple of times. This worked for me.
Easing bank concerns about loaning on a LT in WA - Posted by Dave Hanson
Posted by Dave Hanson on November 24, 2004 at 13:20:57:
I have a bank who has been willing to loan on a property that’s in a land trust. They even did this for me last year, when the trust I used was less sophisticated, so I’m sure it can be done.
This time, after reviewing the trust the out-of-house counsel retained by the bank was
“concerned with the provisions that are present in the trust (not found in ?standard? trusts) namely: the beneficiaries can direct the trustee to remove the property from the trust; to revoke the trust and direct the trustee to take other actions involving the property. These provisions could put our collateral position at risk.”
I assume that she’s referring to this (rather standard) provision in our LT:
“8. DUTY OF TRUSTEE. While the Trustee is sole title holder of the real estate held by him hereunder so far as the public is concerned and has full power to deal with it, it is understood and agreed by the persons in interest hereunder, and by any persons who may hereafter become interested, that the Trustee will deal with it only when authorized to do so in writing and that he will, on the written direction of all of the beneficiaries hereunder at the time, make contracts or deeds for the sale of or otherwise deal with the said real estate or any part hereof. Unless so directed by the beneficiaries, the trustee has no power to control or influence the real property or any use of it.”
Hence my QUESTION:
Any suggestions about proposals that might assuage this lawyer’s concerns without diluting or otherwise compromising our position? I DON’T want to spend time explaining everything we’re trying to accomplish to the bank’s lawyer–not because we have anything to hide, but because (a) it might cause additional complications, and (b) it would be on my dime.
I’m thinking that I might propose a trust amendment that said something like, “notwithstanding the provisions of Section 8, the trustee shall not remove the property from the trust without the written consent of any lienholders of record on the subject property.”
I could live with that provision…am I missing anything?
LT lending in WA - Posted by John Merchant
Posted by John Merchant on November 24, 2004 at 19:02:06:
Dave, you might put this question on the REAPS* listserv/website, the Seattle area BIG REI group, as one or more members might have fought this fight before on WA properties.
*Real Estate Ass’n of Puget Sound", www.REAPS.org
Just send an email with your question to REAPS@yahoogroups.com, and if it doesn’t bounce, as you’re not a member I’d guess, you’ll probably get a WA oriented answer.
If it does bounce I’ll do a cut&paste and see what response I might get.
John Merchant
Tacoma WA
changed language in above - Posted by Dave Hanson
Posted by Dave Hanson on November 24, 2004 at 14:50:57:
The language above was a little sloppy, here’s the revised proposed language:
“Notwithstanding the provisions of Section 1, Section 8, or any other material provision of the 961 East Eleventh 99202 Trust, the trustee shall neither revoke said trust nor remove the subject property from said trust without the express written consent of any holders of a valid, recorded Deed of Trust on the subject property.”
(We’re in a Deed of Trust, not Mortgage state.)