The Fannie Mae Revocable Trust Rider is an optional form used in Fannie's single-family program.
The Fannie Mae Revocable Trust Rider is an optional form used in Fannie's single-family program. Fannie Mae attempts to make all their documents as uniform as possible, often utilizing a rider rather than changing the language within the body of the loan documents. The purpose of this rider is to ensure the trust is properly identified and has the authority to enter into the underlying transaction.
GoDocs' system is able to generate separate certifications of trust that certify each trust is properly formed and each trustee has the authority to enter into the underlying transaction.
Additionally, the language within our loan documents is expanded and includes assurances going beyond what the optional rider provides (e.g., section C.1 of the Loan Agreement.)
Consequently, the inclusion of a rider to the mortgage is unnecessary given the additional provisions and assurances within our loan documents.
The content of the rider is: The term “Borrower” when used in the Security Instrument shall refer to the Revocable Trust Trustee(s), the Revocable Trust Settlor(s), and the Revocable Trust, jointly and severally. Each party signing this Rider below (whether by accepting and agreeing to the terms and covenants contained herein and agreeing to be bound thereby, or both) covenants and agrees that, whether or not such party is named as “Borrower” on the first page of the Security Instrument, each covenant and agreement and undertaking of the “Borrower” in the Security Instrument shall be such party’s covenant and agreement and undertaking as “Borrower” and shall be enforceable by the Lender as if such party were named as “Borrower” in the Security Instrument.
In short, this is an optional rider to denote that the Trustee, Trustor, and Trust are all "Borrower" and are jointly and severally liable.
Our documents have the trustee sign on behalf of the trust and specifically state that the "Trustee acknowledges that any Trust assets may be used to satisfy obligations to Lender incurred by Trustee or Trustor under the Note or otherwise and that neither the Trust nor any Trustor has any assets or liabilities that are not reflected on the financial statement(s) submitted to Lender. The financial statement(s) submitted to Lender describe all assets and liabilities of each Trustor, whether held in the Trust or in an individual capacity".
As stated previously, our documents authorize the trustee of the trust to bind the trust. That power and authority to bind the trust and the trust assets to the loan should also be reflected in the Trust itself (as seen in underwriting or through an entity review). That said, GoDocs stands by the content of our docs and the certification of trust by the trustee to bind the trust and the trust assets to the terms, conditions, and obligations of the loan.