8191 / Can a reverse mortgage be put into a trust?

No other question generates such a diverse array of answers. When it comes to whether a reverse mortgage can be put into a trust, it take less than 10 minutes to find the desired answer (right or wrong) on the Internet. However, the overriding authority as to whether a reverse mortgage can be put into a specific trust that meets HUD requirements is set out in HUD – Directive Number: 4235.1 Home Equity Conversion Mortgages.

4-5 HOME EQUITY CONVERSION MORTGAGES FOR PROPERTY HELD IN TRUST.

HUD will insure HECMs on property in the name of an inter vivos trust, also known as a living trust. In general, a living trust is created during the lifetime of a person; (as opposed to a testimonial trust which is created by the person’s will after his or her death). A living trust is created when the owner of the property conveys his/her property to a trust for his or her own benefit or that of a third party (the beneficiaries). The trust holds legal title, and the beneficiary holds equitable title. A person may name him/herself as the beneficiary. The trustee is under a fiduciary responsibility to hold and manage the trust assets for the beneficiary. The trustee’s responsibilities are set out in the trust agreement.