Need a lender -Financing in a land trust - Posted by Erick

import · March 15, 2003, 10:22pm

Posted by Erick on March 16, 2003 at 18:43:44:

NT

import · March 15, 2003, 10:22pm

Posted by Erick on March 15, 2003 at 23:22:40:

I’m having a tough time finding a lender that will close a loan on a residential investment property with it titled in a land trust. I would, of course, personally sign for the note and then the land trust’s trustee would sign the mortgage document and pledge the property as collateral for the mortgage. The lender is secured. Nothing too fancy. (And no, I don’t want to pull the property out of the trust, obtain the financing and put the property back in the trust)

I’ve found that Fannie/Freddie conforming guidelines don’t allow this so that rules out many lenders that only do conforming loans. But, I’ve heard that many portfolio lenders will do this. I’m making some progress with Washington Mutual. It sounds like they might underwrite this type of loan but does anyone else out there know of any others?
Any mortgage brokers out there know of any? Does anyone know of any mortgage broker type forums out there some where that I might be able to ask this question?

Thanks

import · March 16, 2003, 3:17pm

Re: Need a lender -Financing in a land trust - Posted by James Strange

Posted by James Strange on March 16, 2003 at 16:17:51:

I did some checking on a brokers board. I will not tell you which one since they do not like retail customers posting.

Most post about trust advise taking in out and puting it back in after you get the loan. But you don’t want to do that so here is what I found. These are what was post on the site so I can not verify the info.

“If the property is in an “Intervivos” or living trust then you can go Fannie Mae.”

“However, if it is in a “non-revocable” trust, you are screwed because those are tough to unwind.”

Good Luck

James

import · March 16, 2003, 10:19am

Re: Need a lender -Financing in a land trust - Posted by Les

Posted by Les on March 16, 2003 at 11:19:14:

Erick,

When dealing with residential transactions, it’s always important to include the state the property is located in. This will determine the lending sources available to you.

Although not as critical for commercial transactions, it’s always a good idea to include that information as well.

import · March 16, 2003, 5:58pm

Re: Need a lender -Financing in a land trust - Posted by Erick

Posted by Erick on March 16, 2003 at 18:58:30:

Thanks James.
But, I’ve found that living trusts or title holding trusts or land trusts are conforming if, and only if, you’re putting financing on a personal residence or second home…not investment property.

As far as being revocable, what I believe this requirement provides for is if the bank should have to foreclose, the trust would need to be revoked so that they can take ownership of the prop.

James, would you mind posting a question about this in that MB forum you talked about?? Or, does anyone know of any other broker MB broker forums?

Thanks a lot and I’ll keep checking back.