We have a mortgage investor who will not purchase a mortgage loan if the property is vested in the name of a trust. So, we have the borrower change vesting to the individual in order to get the loan. Is this asking for trouble in that we are 'interfering" with the borrower's estate planning? Do others do this - deed the property out of the trust in order to make the loan?

no. Tho I once attended a seminar given by an attorney who told the attendees that they would be best not to put their homes in a trust if they ever wanted to mortgage them. That was wrong then and it's wrong now. I'd find another investor to sell trust loans to rather than have my bank giving legal advice to applicants.

So, we have the borrower change vesting to the individual in order to get the loan.

I hope you really don't mean "we have the borrower change". You are crossing a serious legal line if you are telling them anything that could negatively impact their estate planning.

Thank you!! That was my concern.

When you see that the investor won't buy a loan because the collateral is in a trust, and you don't have an alternative way to do the loan, you give the reason for the denial without suggesting what the borrower needs to do next. If the borrower asks you whether taking the property out of the trust is the way to go, you should suggest that the question should be put to the applicant's attorney or estate planner.