When people ask me if they can close a real estate purchase transaction using a Land Trust and a lender qualifying the loan under secondary market guidelines, I typically say, no. You can transfer the title the day after closing to your Land Trust, but secondary market guidelines usually prevent you from closing in the name of your Trustee (this is why I recommend using portfolio lenders and not secondary market type lenders). However, if you are borrowing from Bank of America (BOA), the property is located in Illinois AND the trust is an Illinois Land Trust, then you CAN close the deal directly into your trust (and you never take title in your personal name or show up in the chain of title).
There are a few other conditions that have to be met (I have posted all BOA conditions on my Land Trust University website–which is accessed by members only). So, if your property is located in Illinois I encourage you to use BOA if you can get good terms on your loan AND close the deal using an Illinois Land Trust.
Recent Land Trust Student Question: Foreclosure & Land Trusts
Hello, I am here in Southern California, does anybody know the process to stop foreclosure sale if I transfer the deed to a Revocable Trust or Land Trust. Does it work and what is the process?
Mr. Land Trust Expert Response:
There are many benefits to using a Land Trust but putting your property into a land trust will NOT stop a foreclosure. If the foreclosure filing has already occurred, there will be NO effect on the process. If the filing has not be done yet, by the lender, then all that happens (if you put your property into a land trust prior to the filing) is it gives the lender one more person (or entity) to serve (your trustee) in the foreclosure process.