Real Estate and Home Mortgages - Lenders and Revocable vs. Irrevocable Trusts

I have a client (real estate listing) who is the trustee for an irrevocable trust developed for her mother, who is in an assisted living facility. Obviously I have to tread lightly, trying to balance the various dynamics in this type of situation. The property requires some fairly minor repairs to make it competitive with the current market. In exploring various financing scenarios for this work, I have checked with a couple of loan brokers regarding the type of trust that is in place, and both have made it clear that the irrevocable trust would not fly with any of their lending sources. My assumption is that the lender cannot do the inter vivos transfer (normal procedure with the revocable trust) to establish a lien on the property, but no one (brokers or lenders) has been able to provide a specific confirmation or answer as to why the irrevocable trust blocks the process. Anyone know the answer to this question?
Thanks in advance.


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Your question is way too broad. You need to supply more facts. Who set up the trust? Who is the trustee? What is in the trust? Who is/are the beneficiary? ies?

What is the purpose of the loan? Is this property a rental? Is mom on Medicaid for her assisted living. Why are you seeking financing? What will be done with the money if you get the loan?

The trustee in all likelyhood can borrow money and lien the property. This is a matter of trust powers included in the document and state law.

The lenders probably don't want to touch it because they don't know how the loan will be repaid.


Way too many facts missing.

I don't know much about Trusts, but that's not really the issue. It's simply a matter of risk. I can't give you a more specific answer than that. Here, we won't even do power of attorney closings. Sure, the permission may be there legally, but the exposure is too great for something to go wrong, or for fraud to be present so it's not going to happen.

If you haven't already, you need to call around and find lenders that will loan to an end buyer based on purchasing from a land trust.