Best Practices: Attorney Trust Opinion Letter

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Continuing our series of commonly asked questions at closing, we asked Judy Phothisen, our Fulfillment Manager in the Dallas office, for advice on this question.

Judy, I know BM&G prepares Attorney Trust Opinion letters to ensure a loan meets Fannie Mae eligibility requirements. Do you need additional documentation or materials for loans that close in the name of a trust? And if a trust is used to close on multiple loans for different properties, are additional Attorney Trust Opinion letters needed for each respective property?

BM&G requests copies of the preliminary title work, the loan application and the trust instrument in order to prepare an Attorney Trust Opinion letter. Often, when authorized by state law, borrowers will submit a certification of trust rather than the complete trust instrument.

A certification of trust is acceptable in lieu of the actual trust instrument provided that it contains all of the following information required under Fannie Mae eligibility guidelines: 1) the name of trust and date of execution plus any amendments; 2) the trustors; 3) the trustees; 4) the primary beneficiary of the trust; 5) whether the trustors can revoke the trust; 6) whether the trustee can borrow money and mortgage trust property; and 7) applicable state law.

Good news! The Attorney Trust Opinion letter can be used for multiple properties.