To further add to this thread, we have a scenario with the following:
*Irrevocable Trust
*Trustee is deceased
*Granddaughter is beneficiary.
*The Bank's Trust Unit is responsible for the trust.
The Trust Officer approached a lender with the information about the intent of the Trust to purchase a home for the beneficiary. The beneficiary will get her money from the trust in ten years. Trust Officer suggested a 10/1 ARM for the home purchase.
Before we knew about the death of the trustee and the Bank managing the Trust, I had looked at the TRID rules regarding trusts and believed we could look at this as a consumer loan, where the trust had been established for tax/estate planning. The trust could purchase the home and the beneficiary of the trust would occupy it and it could be considered an owner-occupied, consumer loan. (Gilliam v. Levine) However, after being informed of the death of the trustee and the Bank acting for the Trust, is that still an option? The trustee isn't actually signing the loan documents. Would a credit report be pulled on the beneficiary? I've asked for additional information on the trust document itself, as well as details about the beneficiary. But I'm curious about the direction for the loan given the circumstances. Thanks for any help.