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#2244884 - 10/30/20 05:56 PM Occupancy when borrower is a trust
laf0915 Offline
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Joined: May 2006
Posts: 231
When the borrower is a trust and the note is executed only by the trustee of the trust, would occupancy be investment? That is what I am thinking since an entity (the trust) cannot occupy a residence. Is that correct?

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#2244894 - 10/30/20 06:33 PM Re: Occupancy when borrower is a trust laf0915
hmdagal Offline
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Was the note signed 'individually and as trustee'?

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#2244897 - 10/30/20 06:58 PM Re: Occupancy when borrower is a trust hmdagal
laf0915 Offline
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Posts: 231
The note was only signed by the trustee - not as an individual

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#2244902 - 10/30/20 07:47 PM Re: Occupancy when borrower is a trust laf0915
David Dickinson Offline
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Central City, NE
I agree with Code 3. The Commentary to §1003.4(a)(6) #4 states
"…a property is an investment property if the borrower does not, or the applicant will not, occupy the property."

This is really a catch all and should be labeled as "Other", not "Investment Property." For instance, if I pledge my house as collateral for someone to get a loan (a 3rd party pledge), but I am not a borrower, then the LAR should say this is a Code 3 for occupancy type. My house is not the borrower's primary residence or their secondary residence.
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#2244903 - 10/30/20 07:50 PM Re: Occupancy when borrower is a trust laf0915
rlcarey Online
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rlcarey
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Galveston, TX
Unusual to only loan to a trust - I assume this trust is not revocable.
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#2244908 - 10/30/20 09:06 PM Re: Occupancy when borrower is a trust rlcarey
laf0915 Offline
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Joined: May 2006
Posts: 231
It is not revocable. Thanks for the opinions.

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