Posted by Cherylann on 10/19/12 12:12pm
Msg #439200

Am I wrong? Trust question

Took a 3 yr. hiatus, now back in the field. Spent over an hour trying to verify w/title and lender docs in the following scenario are correct:

Property to refi in trust under wife's name only (we'll call her "A")

QCD prepared moving property out of trust into her name only as an individual ("B")

Refi mortgage to be signed by her and her husband (call him "C") as individuals.

2nd QCD prepared moving property from them back into her trust.

So you have A granting to B, then B & C granting to A.

On the notary cert for the move from both as individuals back into her trust, they are insisting the word "Trustee" (preprinted in my cert) not be stricken after I handwrite their names. I believe the capacity is clearly wrong. He is not currently a 'trustee' and won't be afterward.

Am I nuts?

Reply by CJ on 10/19/12 12:26pm
Msg #439205

Technically: not your problem. However . . .

However, striking out "trustee" on your ack IS your problem. Get out your handbook and call your SS. They don't want you doing anything illegal either, and they need to sort it out with their client.

ALSO, if I were you, I woul show the two QCD to the borrowers and have them read the transferring vesting thouroughly before they sign them. You can't give them advice or opinions, but you can point out the black and white. Maybe this is exactly what they want. OR it could be wrong and they won't sign. Perhaps you could ask to fax the two QCD to them before the signing so they can make sure they are correct. Don't say there is a problem, just say you want them to look them over to make sure they are correct. If they have a trust, they are most likely smart enough to know how it all works and how it should be. If they have questions or concerns about the QCD, they need to talk to title. It's better to get this cleared up before it stops the whole loan. Likewise, it's better to get this cleared up so the signing will go smoothly.

You can also call your SS, and say, "I know this is none of my business, but I am concerned and I just want the signing to go smoothly. Can I have permission to forward the QCD to the borrowers before I get to the signing to look them over? I just want to make sure everything is okay, and if they have any questions, it would be great if they were sorted out before I got there". That way you are not stepping on toes and going behind people's backs.

Just my two cents.

Reply by Cherylann on 10/19/12 12:39pm
Msg #439212

Re: Technically: not your problem. However . . .

Thanks, CJ, and I spent over an hour trying to get through to the Closing Team to get it verified ... Was finally told it is printed corrected ... uh, I don't think so. Will definitely cover it with the borrowers from the getgo. Worst case senario as I see it is that if it (the QCD) has to be redone, it would just delay getting it back into trust.

BTW, I assume by SS you are referring to my SoS (Sec of State) ... I would be lucky to get an answer from them by end of next week and signing is in 2 hours. The last time (years ago) I called about a technical notary question (our handbook is kind of a joke when it comes to issues like this), they wouldn't answer the question since they would have been violating UPL, at least in their opinion.

Reply by Linda_H/FL on 10/19/12 1:02pm
Msg #439216

I think you're right Cherylann..the second QCD has

to be corrected conveying from just her back to the trust since it was conveyed from the trust to just her.

As for the cert, yes you need to check your handbook and with your SOS as far as representative capacity is concerned....depending on how the docs were signed, if they signed individually AND as trustee, that's what my certs would read: "Jane Doe, individually and Jane Doe as Trustee of the blankety blank blank Trust blah blah".

You also need to get the ear of someone at title who knows what they're doing - if he's not trustee now and won't be later, how can he sign as trustee and how can you notarize a non-entity?

I hate trust and poa closings.

Reply by ReneeK_MI on 10/19/12 1:05pm
Msg #439217

Agree, and would love to know ...

...how is the vesting on the front of the 2nd QCD written, and how are the signature lines prepared? If they're vested (as IMO they should be) as individuals, and signing as individuals, then why would they need to be identified in the cert as Trustees?

Reply by Cherylann on 10/19/12 1:10pm
Msg #439218

Re: Agree, and would love to know ...

Exactly ... it's her trust. It's taken out of trust to her as an individual. Then her and hubby sign the mortgage (verbiage is her joined by her spouse). Transfer back has both of them signing as individuals, but they want my notary cert (2 of them) to acknowledge each of them as Trustees.

Reply by JanetK_CA on 10/19/12 1:54pm
Msg #439224

Re: Agree, and would love to know ...

I'd also be interested to know how the vesting is on the Mortgage. Just in her name only, as on the 1st QCD? Since you said "they" would be quit claiming the property back into her trust, it seemed to me like either a step was missing or maybe you just meant "she" would be signing it back into the trust?

Reply by Linda_H/FL on 10/19/12 2:06pm
Msg #439226

Re: Agree, and would love to know ...if I understand this

correctly:

Trust QCD (signed only by her) conveys property to her.

Both she and husband sign mortgage (it's stated as "joined by spouse" on the mortgage)

Then THEY TOGETHER convey the property back to the Trust - but he's never on title, just the mortgage. And in her notary cert they won't let her remove the word "Trustee" after HIS name - it must stay - however not only is he never an owner of the property, he's not a trustee either.

Clear as mud now, right??

Reply by Cherylann on 10/19/12 4:35pm
Msg #439243

Re: Agree, and would love to know ...if I understand this

You're REAL close, Linda! Actually, since she is signing as an individual grantor, I couldn't have her capacity as Trustee on that portion of the doc.

Finally called AGAIN from the table and got someone (Bless you, Wendy) who knew what was going on with Trust issues. I got to cross out/initial both references to him and her as Trustee.

For those of you who are totally lost: It's her as Trustee to her as Individual; then him and her sign mortgage (no trust verbage at all in vesting); then him and her as individuals back to her as Trustee.

Just to add some spice to it all, it's investment property, not their primary residence. He mentions they refi'd the primary a year or so ago and it, too, supposedly is in her trust. Never went through any of this QCD stuff and she said she didn't remember having to sign anything as Trustee for that one. Hmmm, glad it's their home and not mine....

Reply by JanetK_CA on 10/19/12 6:28pm
Msg #439277

Re: Agree, and would love to know ...if I understand this

I ran into a very similar situation once and there was one more step. She transferred it out of her trust into her own name. She then had to sign another QCD transferring title from just her name into both their names to get him onto title for the security instrument (a Deed of Trust here). Then they both signed one more QCD to put it back into her trust after the loan funds.

Another way I think they might have been able to handle something like that *here* is to have the husband sign an Interspousal Transfer Deed so that he wouldn't be on title at all. I suppose, though, that the lender might require him on title?

I don't consider myself an expert on these things at all, but I do see tons of properties with trusts involved. I've also heard people say they didn't have to go through all this last time, but I think they just forget - and it's possible someone just stuck a page in front of them and told them where to sign...

Reply by Cherylann on 10/20/12 7:28am
Msg #439338

Re: Agree, and would love to know ...if I understand this

I believe in this case he was not on title to the home and it was a joint application (his monthly income 3x hers). Since the mortgage vesting was 'her joined by her spouse, him' instead of 'her and him as joint tenants', I'm just guessing this fell under some sort of spousal rights issue. Maybe that's why no QCD transferring property from him and her to just her before the QCD putting it back in trust. Leave it to lawyers, LOL.

Reply by ReneeK_MI on 10/20/12 11:56am
Msg #439361

Ah, I just bought a clue ...

You can't use a house for collateral on a loan if you don't own the house. So, what seems to have transpired wasn't so much a case of the lender wanting the house out of the Trust (as they sometimes do), but wanting the husband to have ownership.

Reply by Linda_H/FL on 10/20/12 12:09pm
Msg #439363

I'm still confused...she said

"For those of you who are totally lost: It's her as Trustee to her as Individual; then him and her sign mortgage (no trust verbage at all in vesting); then him and her as individuals back to her as Trustee

If Lender wanted him to have ownership the first QCD should have conveyed to both, not just her. The Trust gave it to her individually, not him. The second QCD had them both conveying back to the trust. One of those QCD's needs to be corrected IMHO