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#2238876 - 07/01/20 11:36 AM Re: Trust Beneficiaries and Right of Rescission rlcarey
dshuff Offline
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dshuff
Joined: Jun 2007
Posts: 15
Ohio
The Grantor is not the beneficiary of the Trust, the beneficiaries prior to death of the Settlor and at the death of the Settlor are the descendants of the Settlor.

The Trustee holds and administers the Trust property prior to death of the Settlor; but the Trustee shall not sales or transfer real property, distribute, encumbrance, mortgage, or loan any trust assets without first obtaining approval from the Settlor.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2238888 - 07/01/20 02:43 PM Re: Trust Beneficiaries and Right of Rescission KML 54
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,568
Galveston, TX
It does not sound like a loan to this trust would even be covered under Regulation Z then.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2238892 - 07/01/20 02:52 PM Re: Trust Beneficiaries and Right of Rescission KML 54
dshuff Offline
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dshuff
Joined: Jun 2007
Posts: 15
Ohio
I do not recall ever having a trust situation quite like this. I believe I was overthinking it due to all of the different moving parts.
Thank you for your reply!

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#2260936 - 10/08/21 03:40 PM Re: Trust Beneficiaries and Right of Rescission KML 54
tryin2comply Offline
Member
Joined: Jun 2013
Posts: 84
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.

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#2260939 - 10/08/21 03:53 PM Re: Trust Beneficiaries and Right of Rescission KML 54
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,568
Galveston, TX
The trustee isn't actually signing the loan documents.

Then who would be signing the documents? Someone has too.


Would a credit report be pulled on the beneficiary?

Why? What do they have to do with the transaction?

I would not vote that this trust would be covered under Regulation Z since the settlor is dead and the trust is now irrevocable and managed by a third party trustee.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2260940 - 10/08/21 03:55 PM Re: Trust Beneficiaries and Right of Rescission KML 54
tryin2comply Offline
Member
Joined: Jun 2013
Posts: 84
Thanks!

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