E-2-04, Signature Requirements for Mortgages to Inter Vivos Revocable Trusts (02/27/2018)

The forms of signature shown below are appropriate for California mortgages. Under California law, the term “settlor” refers to the individual(s) establishing the trust; therefore, Fannie Mae uses this terminology in the signature forms and in their related instructions. Fannie Mae has also used the term “credit applicant” to refer to an individual whose credit is used to qualify for the mortgage. A lender that originates mortgages to inter vivos revocable trusts secured by properties in a state other than California is responsible for making any modifications (including the use of different terminology, if appropriate) needed to conform these signature forms to those that are customary for that state and will be held fully accountable for the use of any invalid signature form(s).

Fannie Mae prefers that all signatures appear on the note itself; however, in certain situations the lender may decide that using a separate attachment for some of the signatures on the note is warranted. (An example is if there is not room for all of the signatures on the note itself.) In these situations, the lender may use a separate attachment or addendum (sometimes referred to as an allonge) for the borrower signatures, so long as the following requirements are met:

• All individual borrower(s) must sign the note itself; lenders may use a signature addendum for trustee signatures.

• The form and content of the signature addendum used must comply with all applicable state, local and federal laws governing the use of an allonge and result in an enforceable and proper signature on the note.

• The addendum must be permanently affixed to the related note and must clearly identify the note by referencing at least the name of the borrower, the date of the note, the amount of the note, and the address of the security property.

• The note must clearly and accurately reference the attached signature addendum.

• Fannie Mae’s status as a “holder in due course” must not be impaired.

The lender must indemnify Fannie Mae (as described in A2-1-03, Indemnification for LossesA2-1-03, Indemnification for Losses), for any losses incurred by Fannie Mae as a result of the use of a signature addendum.

Each institutional trustee of the inter vivos revocable trust and each individual trustee of the inter vivos revocable trust who is not both a settlor and a credit applicant must sign the mortgage note (and any necessary addendum), using a signature block substantially similar to the following, inserted in the Borrower’s Signature lines:

_______________________________________, as Trustee of the _________ [Complete Legal Name of Trust] Trust under trust instrument dated ___________________, __________.

Each individual trustee of the inter vivos revocable trust who is both a settlor and a credit applicant must sign the mortgage note (and any necessary addendum), using a signature block substantially similar to the following, inserted in the Borrower’s Signature lines:

_________________________________________, individually and as Trustee of the _________ [Complete Legal Name of Trust] Trust under trust instrument dated _____________, __________.

Each trustee of the inter vivos revocable trust must sign the security instrument (and any necessary rider), using a signature block substantially similar to the following, inserted in the Borrower’s Signature lines:

_______________________________________, as Trustee of the _________ [Complete Legal Name of Trust] Trust under trust instrument dated ___________________, __________.

The following must be added to the security instrument (and any necessary rider) following the Borrower’s Signature lines (and then must be signed by each settlor of the inter vivos revocable trust who is a credit applicant):

BY SIGNING BELOW, the undersigned, Settlor(s) of the_______________________ [Complete Legal Name of Trust] Trust under trust instrument dated _________, ______________, acknowledges all of the terms and covenants contained in this Security Instrument and any rider(s) thereto and agrees to be bound thereby. _________________________________ (Seal) Trust Settlor.

Whenever the trustee of an inter vivos revocable trust is required to execute the note on behalf of such trust, in accordance with B8-5-02, Inter Vivos Revocable Trust Mortgage Documentation and Signature RequirementsB8-5-02, Inter Vivos Revocable Trust Mortgage Documentation and Signature Requirements, language substantially similar to the following may be added to such trustee’s signature:

...but solely for the limited purpose of supporting the Trust’s granting of a lien in the property pursuant to the Security Instrument. The foregoing Trust has no personal obligation hereunder for payment of any sums secured by the Security Instrument.

The following table provides guidance on how the note and the security instrument should be executed in various situations, including those involving inter vivos revocable trusts.

Note: A “qualified” inter vivos revocable trust must have been established by an individual borrower whose credit was used to qualify for the mortgage loan. If multiple inter vivos revocable trusts are involved, each such trust must be “qualified” in relation to at least one individual borrower in accordance with the Selling Guide.