we took an application for a HELOC and when the title search came back, it was in the name of a trust. We got a copy of the trust and had our attorney review it. It is an invalid trust agreement and the applicant refuses to take any alternate course of action to rectify the issue.

What reason should we use on the AAN? Value or type of collateral not sufficient?

bump

Sounds like you have to use the Other category for this one. Did your attorney specify how the invalid agreement affects title to the property or your ability to perfect a lien? You may need to put something like "inability to perfect a lien on the collateral offered due to an invalid trust agreement".

TMI. Whether or not the trust agreement is valid is a legal opinion. Unless your attorney is willing to be quoted, leave out the "due to .." phrase, otherwise you are providing a legal opinion.

"inability to perfect a lien on the collateral offered due to an invalid trust agreement".

Al

Our folks cringe when they are told to use the Other category. In this case, since the issue is the collateral being insufficient in the sense ofit not being collateral we can take...would we have an argument for going ahead and using "value or collateral insufficient"?

I would be specific as Al suggests. I agree the "Other" line shouldn't be used in most cases, but this is one in which I would use it.