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#2264154 - 12/30/21 07:01 PM Life Estate
burkemi Offline
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John has a property in a life estate. He is selling to Jane. Being a life estate, John will retain a certain degree of "ownership" but is not on the note. Would John need to be listed on the CD and provided a disclosure?
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Lending Compliance
#2264158 - 12/30/21 07:21 PM Re: Life Estate burkemi
rlcarey Online
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rlcarey
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Galveston, TX
John would retain the right of rescission, assuming this is John's principal dwelling. You are really going to allow a remainderman to pledge the property for a loan?
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#2264162 - 12/30/21 09:01 PM Re: Life Estate burkemi
burkemi Offline
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Poor wording on my part. Ownership-wise nothing is changing. It's a refi to reduce rate and payment. It's not a sale and the property remains unchanged between the tenant and the remainderman.
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#2264163 - 12/30/21 09:02 PM Re: Life Estate burkemi
burkemi Offline
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So basically, John has agreed to the refi so Jane can receive a lower payment. He will need to sign the CD, correct?
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#2264164 - 12/30/21 09:09 PM Re: Life Estate burkemi
rlcarey Online
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rlcarey
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I am really confused. So, it is John's property and Jane is a remainderman and the borrower? If that is the case and this is John's principal dwelling, he is entitled to a copy of the CD and the right of rescission. Signatures are never required, only delivery. Sort of unusual for a bank to allow someone to pledge their primary residence for a loan to someone else who has no interest in the property.
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#2264165 - 12/30/21 09:20 PM Re: Life Estate burkemi
burkemi Offline
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Like I said - poor wording on my part.

John is remainderman, Jane is tenant.
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#2264166 - 12/30/21 09:27 PM Re: Life Estate burkemi
rlcarey Online
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rlcarey
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Galveston, TX
OK - then John gets nothing, as he is not a borrower and it is not his principal dwelling. He just signs the security instrument.
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#2264168 - 12/30/21 09:35 PM Re: Life Estate burkemi
burkemi Offline
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Thank you. And sorry for the confusion. smile
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