Replies to This Discussion

Permalink Reply by Bryant Tutas on February 5, 2012 at 7:47am

David. Its no different from any other short sale except they may want to see the declaration page of the trust to see who is authorized to sign the purchase agreement and closing documents. Remember when dealing with a short sale it's the borrower that goes through the short sale. The borrower will almost assuredly be an individual. The person that signed the note is who your are doing the short sale for.

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Permalink Reply by Wendy Smith on February 5, 2012 at 1:19pm

exactly.  the property is owned by a trust but the borrower is most likely not the trust.  to process the short sale, the bank wants the borrowers documentation, the closing department & title company will handle the applicable documentation for title & conveyance. 

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Permalink Reply by Darlene Root on February 5, 2012 at 12:02pm

We have had push back on deals with Wells Fargo.  They will always insist that the home be taken out of the Trust and put into the borrowers name.  I always inform the negotiator that the borrower is protected under the Garn–St. Germain Depository Institutions Act of 1982, and that suggesting that they do this is a violation of their freedom.

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Permalink Reply by David Zagorsky on February 5, 2012 at 12:19pm

Darlene,

Wow, I would hate to meet you in a dark court room.

Thanks for a great answer!

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Permalink Reply by Darlene Root on February 5, 2012 at 12:20pm

LOL Dave.  I am  not sure if that is a compliment or an insult? 

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Permalink Reply by David Zagorsky on February 5, 2012 at 12:23pm

The highest of compliments. If there were a Super Bowl of Short Sales I would want you on my team. Thanks again.

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Permalink Reply by Charlotte Lloyd on February 6, 2012 at 2:13am

Does that work??  I have a situation where the husband has died.  He is on the loan only.  Wife owns the house and she put it in a trust.  BofA is telling me that she has to put the house in her dead husbands name and go through probate to get this 2nd loan from BofA approved because there was no will.   The first is already approved.  They are saying they do not recognize Trusts at BofA only wills and she needs to show she is the executor of the estate.  I am pulling my hair out here.

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Permalink Reply by Jayne Sanders on February 5, 2012 at 4:28pm

If the mortgage is in the trust then no problem...just have the authorized person sign. If they put it in a trust after getting the mortgage they will have to put it back in their name. You will need all listing and sale contracts in the borrower name...Hope this helps

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Permalink Reply by Darlene Root on February 6, 2012 at 10:06am

Charlotte, If the wife put the home in the Trust after her husbands death, she would need to show the death certificate when title work is done to show that that she had the power to do so.  The home does not need to go through probate, nor did he need to have a Will if both of them were on the Deed. 

Although BoA does not recognize Trusts, the Garn St Germain Act overrides that "opinion".  If you cannot get satisfaction from the negotiatior that you are working with, ask to speak to someone in the legal department.  I would send them a copy of the Act. 

 

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Permalink Reply by Charlotte Lloyd on February 6, 2012 at 10:33am

The problem Jayne is the loan is in the husbands name who is deceased.  He has been gone 4 years. They had a trust the home went directly to her when he died.  It was in both of their names prior to him dying also.  They will not recognize the trust.

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Permalink Reply by Darlene Root on February 6, 2012 at 10:42am

The loan has nothing to do with the Trust.  The mortgage and note were signed by the husband and upon his death, the wife is responsible for them.  The wife put the property in the Trust for Estate Planning or tax purposes.  She had the right to do that according to the Garn St Germain Act of 1982.  The lender cannot dictate how she takes title to the property.  Their lien is against the property itself. 

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Permalink Reply by Joseph Alfe on February 6, 2012 at 12:04pm

lenders can and will dictate how they want things done, and the law has little to do with it. Unless you have her attorney start barking at them, they will kill the deal over this.

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