It doesn't state that this trust is a revocable trust - only that it's a Living Trust. Are all living trusts revocable? If the property is in the name of a trust, we prepare the loan docs in the trust's name.
There is no 'all' when it comes to trusts. You either need to read the trust docs inhouse or get a Certificate of Trust that should address FNMA Eligibility Criteria points listed below.
1. The identity of the grantor/trustor/settlor, beneficiary and trustee;
2. The powers of the trustee (e.g., mortgage the subject property);
3. That the subject property is held by the trust;
4. That the trust is revocable;
5. That the trust was created and became effective during the lifetime of the original grantor/trustor/settlor.
Randy, FNMA guidelines do not allow loans to be made to irrevocable trusts.
we recently did a heloc for a customer. The property was in the name of her living trust. The loan docs were all in her name individually with the exception of the mortgage as the property is in the name of trust. Our last compliance review cited us for giving the ROR.
Auditors are different from examiners and what you wrote, JWills, sounds like just a notation and probably a caution to be aware for future incidents. It's not a violation to give the RoR even when it's not required. But you could be bound by it if you give it, so make sure you give it properly.
As far as doc prep goes, in light of the fact that trust don't have income so you're qualifying based on the individuals; AND that the trust must be revocable which means the borrowers could take the property out of the trust the day after closing, we prepare all our trust loans in the names of the borrowers as individual AND as trustees of the trust. That way we follow all rules for individuals and our lien stays in first position even if they change the trust.