NFTYDoor must obtain copies of the trust or trust certification and include them in the loan file. The copies must be certified by an attorney or the grantor/trustor/settlor.
A review of the trust agreement is required to ensure the agreements meets all the following requirements:
- The trust is established by one or more natural persons, solely or jointly. The person establishing the trust is known as the “Settlor,” “Trustor,” or “Grantor,” referred to below as “Settlor.”
- The trust is effective during the Settlor’s lifetime.
- The Settlor is the primary beneficiary of the trust. If there is more than one Settlor, there can be more than one primary beneficiary.
- The Settlor is the trustee or one of the co-trustees.
- The trustee has the power to mortgage the subject property for the purpose of securing a loan to the party (or parties) who are the Borrowers on the note.
- The trustee is not required to obtain written consent from the beneficiaries to mortgage the subject property if written consent has been provided.
- There is no unusual risk or impairment of lender’s rights, such as distributions required to be made in specified amounts other than net income.
- The trust is valid under federal, state, and local law.
- If the trust agreement requires more than one trustee to borrow money or purchase, construct, or encumber realty, the Seller must confirm that the requisite number of trustees have signed the loan documents.
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