Common Land Trust Closing Procedures for Lenders


  1. Verify that the documents have correct vesting.
    Note:Verify that the mortgage document does not include the name of the borrower.

  2. Verify that there is a signed
    Letter of Direction TO MAKE FORM COMPLETION EASIER:
    SAVE the blank form to your computer
    BEFORE entering your information and then
    SAVE AGAIN after completing the form.
    from the appropriate parties and that it lists all the documents that the trustee is to execute.

  3. Collateral Assignments
    1. Must be signed by all beneficiaries

    2. Must be signed by the lender

    3. Cook County
      1. If a lender is lodging a Collateral Assignment for property located in Cook County, a
        Facsimile Assignment of Beneficial Interest TO MAKE FORM COMPLETION EASIER:
        SAVE the blank form to your computer
        BEFORE entering your information and then
        SAVE AGAIN after completing the form.
        must be recorded as required by law.

    4. Chicago
      1. If the subject property is in the City of Chicago, you will need to obtain an Exempt Full Payment Certificate from the City of Chicago Department of Water before the document can be recorded.

    5. Other Municipalities
      1. If the municipality where the property is located has an exempt transfer stamp ordinance, this stamp must be obtained prior to recording.


Key Concepts For Lenders


Beneficiary(ies) or Beneficial Owner(s):

This refers to the property owner or owners and will typically be the borrowers.

Power of Direction:

The holder of the power of direction is the person authorized to direct the trustee to execute documents, including loan documents.

Letter of Direction:

This letter, signed by the holder of the power of direction, authorizes the trustee to execute the document(s) contained in the letter of direction.

Collateral Assignment of Beneficial Interest:

This is the agreement that secures the lenders interest in the beneficial interest of the trust and puts a lien on the beneficial interest in the trust. It is the land trust equivalent of the mortgage. However, since it is not recorded, it does not show up as a lien on record title. Most significantly, it gives the lender a power of direction in the land trust and may allow foreclosure outside the court-monitored foreclosure process through a UCC Article 9 personal property foreclosure.

Release of Collateral Assignment of Beneficial Interest:

This releases the collateral assignment, and it should be executed contemporaneously with the release of the mortgage.

Facsimile Assignment of Beneficial Interest for Collateral Purposes:

One page document used to notify state, county and municipal bodies of a transfer of interest within the land trust. This only needs to be recorded if the subject property is in Cook County.


LENDER OPTIONS FOR LAND TRUSTS

 

HOW CAN WE ASSIST YOU?

Lenders don’t run into land trusts every day. The closing procedures can be somewhat different than other loans, but it doesn’t need to be complicated. Our staff is ready to help with any lender issues, so please contact us if you have any questions about one of your loans.

In addition, many of our clients look for lenders that value their privacy just as much as we do and that lender can be you! Contact Julia Mezher by phone (312) 223-4132 or email Julia.Mezher@ctt.com to join our land trust friendly lender list today.

HELPFUL HINTS

  • Property located in Cook County must have a recorded facsimile assignment when lodging an assignment or collateral assignment with the trust.

  • Property located in the city of Chicago must obtain a water certificate in order to record a facsimile assignment or deed. Be sure to obtain any applicable transfer or exempt stamps from the municipality where the property is located.

  • Property located in the city of Chicago must complete MyDec when recording a facsimile or deed.

  • We can help you with recordings, obtaining water certificates, and completing MyDec.

  • Your documents can be emailed to us at CTLTC@ctt.com for review before being formally submitted. Please include your contact information.

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