Answer:
There may be a problem with not only the current loan request but with the original transaction. Check the records for the real estate loan and make sure the real estate was transfered to the Family Living Trust and is not still in the name(s) of the parties who established the Trust. Next review the document that created the Family Living Trust to determine if the Trustee has the power to obligate the Trust in a lending transaction and pledge Trust assets (the real estate and the home as collateral). If the title to the real estate is not held by the Trust or the Trust document does not authorize the Trustee to enter into loan transactions and emcumber Trust assets, you have a problem.
First published on BankersOnline.com 2/11/02
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