<div dir="ltr">FYI, the lender just told me that this is for a VA refi, which apparently is the reason why the existence of a TODD is a roadblock. I still haven't received any explanation as to why this is the case, but I wanted to send that tidbit out for future reference. </div><br><div class="gmail_quote gmail_quote_container"><div dir="ltr" class="gmail_attr">On Wed, Nov 4, 2026 at 2:16 PM Inge Fordham <<a href="mailto:inge@fordhamlegal.com">inge@fordhamlegal.com</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
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Unfortunately, logic doesn’t always prevail. Sometimes it’s more efficient (and less costly for the client) to just give them what they want. Ten years ago, I may have had more fight in me. I tend to be pickier these days about where I invest the energy
it takes to fight. (I also tweak my back getting out of bed in the morning - it’s so much fun getting older!) <span>😊</span></div>
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<b>From: </b><a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>> on behalf of Zack Hofstad <<a href="mailto:zack@hofstadlaw.com" target="_blank">zack@hofstadlaw.com</a>><br>
<b>Date: </b>Wednesday, November 4, 2026 at 2:13 PM<br>
<b>To: </b>WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com" target="_blank">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject: </b>Re: [WSBAPT] TODD and Refinancing issue<br>
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Inge: That's a good idea, I'll look into it. </div>
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Daniel: You and I are on the exact same page, and I tried to explain how the TODD shouldn't affect any of this as the TODD beneficiary 1. Isn't a borrower because they have no present interest in the property, and 2. May not actually obtain ownership of
the property, and has no legal right to the property unless they jump through the necessary hoops once the owner dies. </div>
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The thing that really doesn't make sense to me is why Fannie would be at all concerned about the rights of a contingent beneficiary. </div>
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<h4 style="direction:ltr;line-height:1.3;margin-top:0px;margin-bottom:16px;font-family:GlyphaBold,Arial,Helvetica,sans-serif;font-size:18px;font-weight:500">
<span style="color:rgb(18,18,18);background-color:rgba(0,0,0,0)">Acceptable Forms of Property Ownership</span></h4>
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<span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)">Title to the property must be held as fee simple (which may include title held in a life estate), leasehold estate, or as a co-op form of ownership. (See
</span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(12,119,186);background-color:rgba(0,0,0,0);line-height:1.6"><a href="https://selling-guide.fanniemae.com/sel/b2-2-01/general-borrower-eligibility-requirements" rel="bookmark" style="color:rgb(12,119,186);text-decoration:none;margin-top:0px;margin-bottom:0px;background-color:rgba(0,0,0,0)" target="_blank">B2-2-01,
General Borrower Eligibility Requirements</a></span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18);line-height:1.6">
</span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(12,119,186);background-color:rgba(0,0,0,0);line-height:1.6"><a href="https://selling-guide.fanniemae.com/sel/b2-3-03/special-property-eligibility-and-underwriting-considerations-leasehold-estates" rel="bookmark" style="color:rgb(12,119,186);text-decoration:none;margin-top:0px;margin-bottom:0px;background-color:rgba(0,0,0,0)" target="_blank">B2-3-03,
Special Property Eligibility and Underwriting Considerations: Leasehold Estates</a></span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)">; and
</span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(12,119,186);background-color:rgba(0,0,0,0);line-height:1.6"><a href="https://selling-guide.fanniemae.com/sel/b4-2.3-04/loan-eligibility-co-op-share-loans" rel="bookmark" style="color:rgb(12,119,186);text-decoration:none;margin-top:0px;margin-bottom:0px;background-color:rgba(0,0,0,0)" target="_blank">B4-2.3-04,
Loan Eligibility for Co-op Share Loans</a></span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)">, for additional information.)</span></p>
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<span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)"> </span></p>
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<p style="direction:ltr;line-height:1.6;margin-top:0px;margin-bottom:20px">
<span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)"><b>Note:</b> Life estates satisfying the requirements described in
</span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(12,119,186);background-color:rgba(0,0,0,0);line-height:1.6"><a href="https://selling-guide.fanniemae.com/sel/b2-2-01/general-borrower-eligibility-requirements" rel="bookmark" style="color:rgb(12,119,186);text-decoration:none;margin-top:0px;margin-bottom:0px;background-color:rgba(0,0,0,0)" target="_blank">B2-2-01,
General Borrower Eligibility Requirements</a></span><span style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18)">, are often chosen as a means to avoid probate. However, similar arrangements do not qualify as life estates
for loan eligibility purposes if:</span></p>
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<li style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18);direction:ltr;line-height:1.6">
<span style="line-height:1.6" role="presentation">the named successors under such arrangements do not have vested and irrevocable property rights in the subject property, such as with "lady bird deeds", or</span></li><li style="font-family:"Source Sans Pro",sans-serif;font-size:16px;color:rgb(18,18,18);direction:ltr;line-height:1.6">
<span style="line-height:1.6" role="presentation">the current holder of the property can, before their own death, transfer full ownership of the subject property to a third party without the approval or consent of any contingent beneficiaries, such as under
typical statutory "transfer on death deeds."</span></li></ul>
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<div class="gmail_attr" style="direction:ltr">On Wed, Nov 4, 2026 at 12:24 PM Zack Hofstad <<a href="mailto:zack@hofstadlaw.com" target="_blank">zack@hofstadlaw.com</a>> wrote:</div>
<blockquote style="margin:0px 0px 0px 0.8ex;padding-left:1ex;border-left:1px solid rgb(204,204,204)">
<div class="gmail_quote" style="direction:ltr">I just heard from a past client that their refi is being held up due to a TODD he recorded a few years ago. </div>
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<div class="gmail_quote" style="direction:ltr">The lender sent me the following information from Fannie Mae, which states in the middle of the page that TODDs will prevent loan eligibility because they allow for the current owner of the property to transfer
ownership without the consent of the named beneficiary on the TODD. </div>
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<div class="gmail_quote" style="direction:ltr"><a href="https://selling-guide.fanniemae.com/sel/b2-3-01/general-property-eligibility" target="_blank">https://selling-guide.fanniemae.com/sel/b2-3-01/general-property-eligibility</a></div>
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<div class="gmail_quote" style="direction:ltr">This was news to me. Has anyone faced this issue, and is there anything to be done besides recording a revocation of the TODD, closing on the refi, and then recording a new TODD (which is the lender's suggested
plan of action)? </div>
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<div class="gmail_quote" style="direction:ltr">--</div>
<div class="gmail_signature" style="direction:ltr">Zack Hofstad</div>
<div class="gmail_signature" style="direction:ltr">Hofstad Law</div><a href="https://www.google.com/maps/search/4305+Lacey+Blvd+SE+%0D%0A+Lacey,+WA+98503?entry=gmail&source=g">
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<div class="gmail_signature" style="direction:ltr">phone/fax: <a href="tel:(360)%20515-7879" target="_blank">
360.515.7879</a></div>
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