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#1851497 - 09/12/13 04:16 PM Loan Secured by Trust to Purchase Home
Anonymous
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What requirements/disclosure apply to a loan secured by a trust to purchase a home? Parents are allowing son to use their trust as collateral to purchase a home.

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#1851520 - 09/12/13 04:40 PM Re: Loan Secured by Trust to Purchase Home Anonymous
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
Parents are allowing son to use their trust as collateral to purchase a home.

You are going to have to give more details such as is the trust purchasing the home or is the son purchasing the home using the trust's assets? What assets of the trust are securing the loan?

Also, I would strongly suggest you have an attorney review the trust agreement. I find it difficult to believe that a trust agreement would allow the trust's assets to be used where the transaction does not benefit the trust and this transaction benefits the son, not the trust.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1851567 - 09/12/13 05:44 PM Re: Loan Secured by Trust to Purchase Home Dan Persfull
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Quote:
Also, I would strongly suggest you have an attorney review the trust agreement.


Start there; everything else is an academic issue. A trust can say anything, anything. There is no standard form document. Still, I would be surprised if the trustees were empowered to pledge trust assets as collateral.
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#1851574 - 09/12/13 05:55 PM Re: Loan Secured by Trust to Purchase Home Anonymous
Truffle Royale Offline

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I'm confused as to why they would even need to pledge trust assets to secure a home purchase. Aren't you going to take the new house as collateral??? If this is simply abundance of caution, the LO ought to give some thought to the cost to the buyer and/or parents before requiring it.

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