Vesting Title in a Trust
BofI Federal Bank accepts vesting of title in most forms of trusts, including irrevocable and blind trusts.
For Inter Vivos Revocable Trusts that meet FNMA guidelines, Broker may certify that the Trust meets
FNMA guidelines and submit the following documentation in the package.
1. Certified copy of the fully executed Trust Agreement.
2. Opinion letter from Broker’s legal counsel stating that the Trust meets FNMA guidelines for
an Inter Vivos Revocable Trust. (sample provided)
For all Trusts preapproval of the Trust must be received from BofI Federal Bank prior to loan closing.
Provide the following documentation for review:
1. Certified copy of the fully executed Trust Agreement and any amendments thereto, and the
Preliminary Title Report.
2. Such other documents and certifications reasonably requested by BofI Federal Bank or the
title company or as required under state law.
BofI Federal Bank charges a flat fee of $250.00 for its review of all documents. If further review is
required, BofI Federal Bank will, upon approval from Broker, forward documents to BofI Federal Bank’s
counsel for further review and opinion. BofI Federal Bank retains the right to invoice Broker for any fees
or costs, both third party and internal, related to the review of all loans.
Trust documents should be uploaded with the loan file.
Attachments;
1. Form of Opinion of Counsel (for FNMA Compliant Trusts)
2. Form of Trust Certification
3. Accommodation Rider
Form of Opinion of Counsel
(for FNMA compliant trusts)
For each FNMA compliant Trust, the Broker may provide to BofI Federal Bank an opinion of
counsel from its attorney which shall be in satisfactory form and substance to BofI Federal Bank as
follows:
1. The Mortgagor is a revocable inter vivos living trust that meets the guidelines of and is
acceptable to Fannie Mae/Freddie Mac.
2. The Mortgagor (a) is a revocable inter vivos living trust, duly formed and validly existing
under the laws of the state of its creation and in any other jurisdiction where the Mortgaged
Property is located and (b) has all the requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted in the State of its
creation and in any other jurisdiction where the Mortgaged Property is located. The
trustees acting on behalf of the Mortgagor have been duly authorized to bind the Mortgagor
to the Mortgage.
3. The execution and delivery of the Mortgage and the performance by the Mortgagor of its
obligations thereunder (a) are within the trust’s powers; (b) has been duly authorized by all
requisite trust action; (c) will not violate, be in conflict with, result in the breach of, or
constitute (with due notice or lapse of time, or both) a default under its trust agreement;
and (d) will not violated be in conflict with, result in the breach of, or constitute (with due
notice or lapse of time, or both) a default under any stature, regulation, rule order or other
legal requirements applicable to it, nor to our knowledge, any agreement to which the
Mortgagor is bound.
Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to
them in BofI Federal Bank’s Sellers guide.
Form of Certification of Trust by Trustee(s)
The undersigned, Trustee(s) of the ______________________________, hereby certify or certifies as
follows:
1. Creation of Trust. The trust was created on _____________________ [specify date], by
____________________________________, [specify names of all settler(s)], as Settlers,
under a declaration of trust or trust agreement executed on that date.
2. Trustee (s). all the currently acting trustees of the trust is or are
___________________________________________________________________________
____________________________________________________________ [specify names].
3. Revocability of Trust. The Trust is: { } revocable { } is not revocable.
4. Powers of the Trustee (s). The powers of the Trustee (s) to manage trust property are:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
{continue descriptions on additional pages if necessary}
5. Tax Identification Number. The tax identification number of this trust is: ________________
6. Manner in Which Title to Assets should be Taken: Title to trust assets should be taken in the
following term:
___________________________________________________________________________
___________________________________________________________________________
7. No Revocations, Modifications or Amendments. The trust has not been revoked, modified
or amended in any manner that would cause the representations contained in this trust
certification of trust to be incorrect.
8. Signed by all Currently Acting Trustees. This certification is being signed by all of the
currently acting trustees of the trust.
9. Accuracy. This certification of trust is a true and accurate statement of the matters referred
to herein.
10. Signature Authority. If there are two or more trustees: [select one below]
[ ] All of the trustees are required to sign in order to exercise the powers of the trustee
under the trust.
[ ] The signature of only one trustee is required to exercise the powers of the trustee under
the trust.
11. Reliance on this Certification. This certification is made in accordance with
______________________ Probate Code Section ____________________. Any transaction
entered into by a person acting in reliance on this certification shall be enforceable against
the trust assets.
I (we) declare under penalty of perjury under the laws of the State of
________________________ that the foregoing is true and correct.
Dated this ________ day of ___________201__.
___________________________________
[signature of Trustee]
Printed Name: ______________________
___________________________________
[signature of Co-Trustee]
________________________________
[signature of Trustee]
Printed Name: ____________________
Printed Name: _______________________
Notary Acknowledgement
STATE OF _________________________
COUNTY OF _______________________
)
)ss.
)
On this _____ day of ________________, 201___, before me, ___________________________
Notary Public, personally appeared _____________________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person[s] whose
name[s] [is or are] subscribed to the within instrument and acknowledged to me that [he or she
or they] executed the same in [his or her or their] authorized [capacity or capacities], that by [his
or her or their] signature[s] on the instrument the person[s], or the entity upon behalf of which
the person[s] acted, executed the instrument.
WITNESS my hand and official seal.
Signature _________________________________________
My Commission expires: ____________________________
(SEAL)
Accommodation Rider
Loan Number ______________
THIS ACCOMMODATION RIDER is made this ________ day of ______________________, 201__
and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of
Trust or Security Deed (the “Security Instrument”) of the same date given by the undersigned
(the “Mortgagor”) to secure Borrower’s Promissory Note (the “Note”) to
___________________________________________ (the “Lender”) of the same date and
covering the property described in the Security Instrument and located at:
______________________________________________________________________________
[property address]
Mortgagor acknowledges it is a __________________________________ and any reference in
[Trust/LLC/Partnership/Corporation]
Mortgage, Deed of Trust or Security Deed to an individual or borrower shall mean the
_________________________________.
[Trust/LLC/Partnership/Corporation]
ADDITIONAL COVENANTS: In addition to the covenants and agreements made in the Security
Instrument, Mortgagor and Lender further covenant and agree as follows:
In exchanged for a valuable and sufficient consideration, Mortgagors are executing the Security
Instrument and this Accommodation Rider to secure the above described Note. The
Undersigned Mortgagors, without affecting Lender’s rights hereunder or the lien hereof, waives
any right of noticed or demand in the event Lender, pursuant to the Note and this Security
Instrument and any amendments thereto, (a) renews, extends, accelerates or otherwise
changes the terms o f the indebtedness or any part thereof, including increases or decreases of
the rate of interest thereon; (b) takes and holds additional security for the payment of the
indebtedness guaranteed, and exchanges, enforces, waives and releases any security; (c) applies
such security and directs the order or manner of sale thereof as Lender in its discretion may
determine; and (d) releases or substitutes any one or more endorsers or guarantors. Lender
may without notice assign this Security Instrument in whole or in part.
ACCOMMODATION: The Security Instrument secures a Promissory Note executed by:
________________________________ collectively, (“Borrower”) in favor of the Lender
thereunder. Mortgagor is executing this Accommodation Rider as an accommodation to
Borrower and thereafter agrees as follows:
Mortgagor waives any right to require Lender to (a) proceed against Borrower; (b) proceed
against or exhaust any security held from Borrower; (or (c) pursue any other remedy in Lender’s
power whatsoever. Lender may, at its election, foreclose upon any such security by judicial or
non-judicial sale, without affecting or impairing in any way the liability of Mortgagor hereunder
except to the extent the indebtedness has been paid, and Mortgagor waives any defense arising
out of the absence, impairment or loss of any right or remedy of Mortgagor against Borrower, or
any such security, whether resulting from such election by Lender or otherwise. Mortgagor
waives any defense arising by reason of the cessation from any cause whatsoever of the liability
of Borrower. Until all indebtedness of Borrower to Lender shall have been paid in full, even
though such indebtedness is in excess of Mortgagor’s liability hereunder, Mortgagor shall have
no right of subrogation, and waives any right to enforce and remedy which Lender now has or
may hereafter have against Borrower and waives any benefit of, and any right to participate in
any security now or hereafter held by Lender. Mortgagor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and
notices of acceptance of the Security Instrument and of the existence, creation or incurring of
new or additional indebtedness. Mortgagor assumes the responsibility for being and keeping
himself informed of the financial condition of Borrower and of all other circumstances bearing
upon the risk of nonpayment of the indebtedness which diligent inquiry would reveal, and agree
that absent a request for such information by Mortgagor, Lender shall have no duty to advise
Mortgagor of information know to it regarding such condition or any such circumstances.
______________________________________________________________________________
BY SIGNING BELOW, Mortgagor accepts and agrees to the terms and covenants contained in
this Accommodation Rider.
___________________________________________ [Entity Name]
__________________________________
Mortgagor
________________________________
Mortgagor
__________________________________
________________________________
Checklist for Review of Inter Vivos Revocable Trusts
BofI Federal Bank, USA follows the requirements of Fannie Mae concerning Inter Vivos
Revocable Trusts. Please review Fannie Mae requirements attached hereto for specific
requirements. You should also periodically review the Fannie Mae requirements posted
on its website to monitor updates to the requirements.
A. Criteria for the Trust:
1. The trust must be established by a written document during the lifetime of the
individual(s) establishing the trust (individually and collectively, the “grantor), to be
effective during his or her lifetime. The entire trust agreement, including all
addenda, must be submitted to BofI Federal Bank and the agreement must be
executed by all parties, dated and notarized.
2. The trust must be one in which the grantor has reserved to himself or herself the
right to revoke the trust during his or her lifetime.
3. The primary beneficiary of the trust must be the grantor. If the trust is established
jointly by more than one grantor, there may be more than one primary beneficiary –
as long as the income or assets of at least one of the grantors will be used to qualify
for the mortgage and that grantor will occupy the security property and sign the
mortgage instruments.
4. The trust document must name one or more trustees to hold legal title to, and
manage, the property that has been placed in the trust. The trustees must include
either the grantor (or at least one of the grantors, if there are two or more) or an
institutional trustee that customarily performs trust functions in (and is authorized
to act as trustee under the laws of) the relevant state.
5. The trustee(s) must have the power to mortgage the security property for the
purpose of securing a loan to the party (or parties) who are the “borrower(s)” under
the mortgage or deed of trust note.
6. The grantor and trustees of the Trust must execute the note. The individual
executing the note must be the person whose income and assets were used to
qualify for the loan. If real property is in a community property state, the spouse
must sign the note.
7. Ensure trust assets include the real property being mortgaged by the Trust.
8. Verify no state laws impair ability of Trust to mortgage property and for lender to
enforce rights under mortgage.
B.
Criteria for the Mortgage;
1. The security property must be a one-family residence that is occupied by at least
one of the grantors (and whose income or assets are used to qualify for the
mortgage) or a one-family second home.
2. Full title to the security property must be vested in the trustee(s) of the inter vivos
revocable trust. There may be no other owners.
3. The title insurance policy must assure full title protection and must state that title to
the security property is vested in the trustee(s) of the inter vivos revocable trust. It
must not list any exceptions with respect to the trustee(s) holding title to the
security property or trust.
4. The mortgage must be underwritten as if the grantor (or at least one of the
grantors, if there are two or more) were the borrower (or a co-borrower, if there
are additional individuals whose income or assets will be used to qualify for the
mortgage).
Checklist for Review of Qualified Personal Residence Trusts
Qualified Personal Residence Trusts are irrevocable and BofI Federal Bank will have to approve these on
an exception basis to its policy of only accepting inter vivos revocable trusts.
A. Criteria for the Trust:
1. The trust must be established by a written document during the lifetime of the individual(s)
establishing the trust (individually and collectively, the “grantor”). The entire trust agreement,
including all addenda, must be submitted to BofI Federal Bank and the agreement must be
executed by all parties, dated and notarized.
2. The trust will normally have a set term. If the term of the trust is shorter than the term of the
Note, all beneficiaries must execute the Note and Mortgage. Beneficiaries must have the legal
capacity to be bound to the Note and Mortgage (i.e. minors cannot execute).
3. The primary beneficiary of the trust will normally be someone other than the grantor. The
beneficiary may not have any powers to control the trust.
4. The trust document must name one or more trustees to hold legal title to, and manage, the
property that has been placed in the trust.
5. The trustee(s) must have the power to mortgage the security property for the purpose of
securing a loan to the party (or parties) who are the “borrower(s)” under the mortgage or deed
of trust note.
6. The grantor and the trustees of Trust must execute the note. The individual executing the note
must be the person whose income and assets were used to qualify for the loan. If real property
is in a community property state, the spouse must sign the note.
7. Ensure trust assets include the real property being mortgaged by the Trust.
8. Verify no state laws impair ability of Trust to mortgage property and for lender to enforce rights
under mortgage.
B. Criteria for the Mortgage
1. The security property must be a one-family principal residence that is occupied by at least one
of the grantors ( and whose income or assets are used to qualify for the mortgage) or a onefamily second home.
2. Full title to the security property must be vested in the trustee(s) of the trust. There may be no
other owners.
3. The title insurance policy must assure full title protection and must state that title to the
security property is vested in the trustee(s) of the trust. If must not list any exceptions with
respect to the trustee(s) holding title to the security property or to the trust.
4. The mortgage must be underwritten as if the grantor (or at least one of the grantors, if there
are two are more) were the borrower (or a co-borrower, if there are additional individuals
whose income or assets will be used to qualify for the mortgage).
FNMA trust requirements:
Trust Requirements
The inter vivos revocable trust must be established by one or more natural persons, solely or
jointly. The primary beneficiary of the trust must be the individual(s) establishing the trust.
If the trust is established jointly, there may be more than one primary beneficiary as long as the
income or assets of at least one of the individuals establishing the trust will be used to qualify for
the mortgage.
The trustee(s) must include either:
• the individual establishing the trust (or at least one of the individuals, if there are two or more)
or
• an institutional trustee that customarily performs trust functions in and is authorized to act as
trustee under the laws of the applicable state.
The trustee(s) must have the power to mortgage the security property for the purpose of securing
a loan to the party (or parties) who are the borrower(s) under the mortgage or deed of trust note.
Eligible Property and Occupancy Types
Standard property types are eligible. The following occupancy types are eligible:
• one- to four-unit principal residences (at least one individual establishing the trust must
occupy the security property and sign the loan documents),
• one-unit second homes, or
• one- to four-unit investment properties.
Underwriting Considerations
The mortgage must be underwritten as if the individual establishing the trust (or at least one
of the individuals, if there are two or more) were the borrower (or a co-borrower, if there are
additional individuals whose income or assets will be used to qualify for the mortgage).
Title and Title Insurance Requirements
The lender must retain in the individual mortgage file a copy of any trust documents that the title
insurance company required in making its determination on the title insurance coverage.
Regarding title and title insurance requirements, lenders represent and warrant that:
• Title held in the trust does not in any way diminish Fannie Mae’s rights as a creditor, including
the right to have full title to the property vested in Fannie Mae should foreclosure proceedings
have to be initiated to cure a default under the terms of the mortgage.
• The title insurance policy ensures full title protection to Fannie Mae.
• The title insurance policy states that title to the security property is vested in the trustee(s) of
the inter vivos revocable trust.
• The title insurance policy does not list any exceptions with respect to the trustee(s) holding
title to the security property or to the trust, and
• Title to the security property is vested solely in the trustee(s) of the inter vivos revocable trust,
jointly in the trustee(s) of the inter vivos revocable trust and in the name(s) of the individual
borrower(s), or in the trustee(s) of more than one inter vivos revocable trust.