The format and content of our standard inter vivos revocable trust rider is primarily governed by FNMA’s requirement, as set forth in FNMA 2014 Selling Guide B8-4-01, E-2-05, & E-2-06, with any necessary modifications to ensure that the rider applies with any applicable laws and Federal agency requirements.
Currently, signature lines for trustees, settlors, and any other individuals (such as NPEs) print under one acknowledgment. However, under Ibid. E-2-06, there are two acknowledgments: one for trustees and one for settlors. In addition, Ibid. E-2-05, which sets forth model language for loans secured by property in California, also contains two such acknowledgments – but with language which differs from the form of acknowledgments in Ibid. E-2-06.
Pursuant to our policy of following model language as closely as possible, but also to reconcile the discrepancy between these two sets of model language and to accommodate cases where NPEs are also present in the loan transaction, we will be modifying the acknowledgment sections of Cx1482 as follows:
For California Loans
We have decided to use the model acknowledgments in Ibid. E-2-05 for loans secured by property in California. The first acknowledgment will be for trustees, will be followed by the trustee signature lines, and will state the following:
“BY SIGNING BELOW, the Revocable Trust Trustee(s) accepts and agrees to the terms and covenants contained in this Revocable Trust Rider.”
The second acknowledgment will follow the trustee signature lines, will be for settlors, and will state the following:
“BY SIGNING BELOW, the undersigned Revocable Trust Settlor(s) acknowledges all of the terms and covenants contained in this Revocable Trust Rider and agrees to be bound thereby.”
Following the settlor signature lines, a third acknowledgment will print for any other individuals who are signatories to the security instrument. It will state the following:
“BY SIGNING BELOW, the undersigned individual(s) acknowledge(s) all of the terms and covenants contained in this Security Instrument and any rider(s) thereto and agrees to be bound thereby.”
For All Other Loans
We will use the model acknowledgments in Ibid. E-2-06 for all other loans. Similar to what is described above, three different acknowledgments will print. The text for the trustee acknowledgment will be as follows:
“BY SIGNING BELOW, the Revocable Trustee Trustee(s) accept(s) and agree(s) to the terms and covenants contained in this Revocable Trust Rider.”
The settlor acknowledgment will be as follows:
“BY SIGNING BELOW, the undersigned, Settlor(s) of the [name of trust] under trust instrument dated [month/day], [year], acknowledges all of the terms and covenants contained in this Security Instrument and any rider(s) thereto and agrees to be bound thereby.”
And the acknowledgment for other individuals will be as follows:
“BY SIGNING BELOW, the undersigned individual(s) acknowledge(s) all of the terms and covenants contained in this Security Instrument and any rider(s) thereto and agrees to be bound thereby.”
Other Changes
In some states, such as Montana and Washington, “settlors” are referred to by some other name under state law (such as “trustors”). In these states, we have retained such names rather than changing them to “settlors” in the acknowledgments.
In addition, we will be making minor modifications to Definitions (C) & (F), and the first clause of the body of the document, in order to match the model language found in Ibid. E-2-05.
These changes will take effect on November 4, 2014. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 28, 2014
DR 158240
Update:
After further review, we have also decided to also make the above changes to our generic NY CEMA GAP – Inter Vivos Revocable Trust Rider (Cx16253). These updates will be available immediately.
November 14, 2014
DR 160641