What we request
- A certification of trust signed by the currently acting trustees, in the form your state's statute contemplates.
- The pages naming the current trustees and any successor appointment, and the page granting the power to borrow and to mortgage or encumber real property.
- Signature pages of the trust and any amendment that changed the trustees or those powers.
- The recorded deed into the trust, so the vesting on the title commitment matches the documents exactly.
If a program's policy is to have its own counsel review the full instrument, we say so before the client sends anything, and offer the programs that do not.
What we will never ask your client to do
- Deed the home out of the trust to make the loan easier for a lender.
- Amend the trust on our say-so. If a trust lacks borrowing power, we tell the client that the program needs it and send them back to you.
- Change the trustees, the beneficiaries or anything else about the plan.
Where we need you
The title insurer and the lender decide whether a trust is acceptable; neither we nor they give your client legal advice about it. The questions that come back to you are the ones only the drafter can answer: whether a trust that is silent on encumbrance grants the power under your state's default trustee powers, whether a settlor's incapacity has shifted authority to a successor, whether a homestead or community-property issue changes who must sign, and whether borrowing against the home conflicts with why the trust exists.
Drafting notes we see make a difference
- An express power to borrow and to mortgage, pledge or encumber trust real property, rather than reliance on general powers.
- A clear statement of whether co-trustees may act alone or must act jointly.
- A ready-to-sign certification of trust delivered with the plan, updated when trustees change.
How to send a client
An email with the client's name and contact details, the trust's name and date, the property's state and county, and anything you already know about the title is enough. Korbin calls the client, confirms which programs accept the trust, and sends you and the client the program's trust-document list before anyone gathers paperwork. You stay copied on anything that touches the trust.
No referral fees
The anti-kickback section of the federal Real Estate Settlement Procedures Act prohibits giving or accepting a fee or thing of value for referring settlement business on a federally related mortgage loan. We do not pay attorneys for referrals, and we do not accept anything for sending clients to an attorney. A referral should rest on the work.
- Real Estate Settlement Procedures Act §8, 12 U.S.C. §2607 — prohibition on fees and kickbacks for referrals of settlement business
- Florida Statutes §736.1017, certification of trust
- California Probate Code §18100.5, certification of trust (including subdivision (h), liability for bad-faith demands for the full trust instrument)
Questions trust owners ask about this
Do you need the full trust?
Usually not. Most programs accept a certification of trust and the excerpts naming the trustee and the trustee's power to encumber. When a program requires the full instrument, we say so up front.
Will you ask my client to deed the house out of the trust?
No. We place lines with programs that accept the trust as it is.
Do you pay referral fees?
No. Federal law prohibits fees for referrals of settlement business on federally related mortgage loans, and we do not offer or accept them.
Keep reading
- What the lender needs from your trustThe certification of trust, and why you rarely have to hand over the whole document.
- Should you deed the house out of the trust?The bank's workaround, and the problems it leaves behind.
- Irrevocable trusts, land trusts and LLCsWhich kinds of trust can borrow, and which usually cannot.
- Successor trustees and heirsWhat changes when the person who made the trust dies or cannot act.