<div dir="ltr">Inge:  That's a good idea, I'll look into it.  <div><br></div><div>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><div><br></div><div>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><div><br></div><div><div class="gmail-paragraph gmail-paragraph--type--policy-statement gmail-paragraph--view-mode--default" style="box-sizing:border-box;color:rgb(18,18,18);font-family:"Source Sans Pro",sans-serif;font-size:16px"><h4 class="gmail-guide-statement__heading" style="box-sizing:border-box;margin-top:0px;margin-bottom:16px;font-synthesis:none;font-family:GlyphaBold,Arial,Helvetica,sans-serif;font-weight:500;line-height:1.3;font-size:18px"><a id="gmail-P1441" style="box-sizing:border-box;color:inherit;background-color:rgba(0,0,0,0)">Acceptable Forms of Property Ownership</a></h4><div class="gmail-body-field" style="box-sizing:border-box;margin-bottom:32px"><p style="box-sizing:border-box;margin-top:0px;margin-bottom:20px;line-height:1.6">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 class="embedded-entity" style="box-sizing:border-box;line-height:1.6;margin-bottom:12px;display:inline;width:auto"><a href="https://selling-guide.fanniemae.com/sel/b2-2-01/general-borrower-eligibility-requirements" class="gmail-guide-internal-link" rel="bookmark" style="box-sizing:border-box;color:rgb(12,119,186);text-decoration:none;background-color:rgba(0,0,0,0)">B2-2-01, General Borrower Eligibility Requirements</a> </span><span class="embedded-entity" style="box-sizing:border-box;line-height:1.6;margin-bottom:12px;display:inline;width:auto"><a href="https://selling-guide.fanniemae.com/sel/b2-3-03/special-property-eligibility-and-underwriting-considerations-leasehold-estates" class="gmail-guide-internal-link" rel="bookmark" style="box-sizing:border-box;color:rgb(12,119,186);text-decoration:none;background-color:rgba(0,0,0,0)">B2-3-03, Special Property Eligibility and Underwriting Considerations: Leasehold Estates</a></span>; and <span class="embedded-entity" style="box-sizing:border-box;line-height:1.6;margin-bottom:12px;display:inline;width:auto"><a href="https://selling-guide.fanniemae.com/sel/b4-2.3-04/loan-eligibility-co-op-share-loans" class="gmail-guide-internal-link" rel="bookmark" style="box-sizing:border-box;color:rgb(12,119,186);text-decoration:none;background-color:rgba(0,0,0,0)">B4-2.3-04, Loan Eligibility for Co-op Share Loans</a></span>, for additional information.)</p><p style="box-sizing:border-box;margin-top:0px;margin-bottom:20px;line-height:1.6"> </p><blockquote class="gmail-note" style="box-sizing:border-box;margin:0px 0px 32px;border-left:4px solid rgb(8,82,128);padding:0px 1em"><p style="box-sizing:border-box;margin-top:0px;margin-bottom:20px;line-height:1.6"><strong style="box-sizing:border-box;font-weight:bold">Note:</strong> Life estates satisfying the requirements described in <span class="embedded-entity" style="box-sizing:border-box;line-height:1.6;margin-bottom:12px;display:inline;width:auto"><a href="https://selling-guide.fanniemae.com/sel/b2-2-01/general-borrower-eligibility-requirements" class="gmail-guide-internal-link" rel="bookmark" style="box-sizing:border-box;color:rgb(12,119,186);text-decoration:none;background-color:rgba(0,0,0,0)">B2-2-01, General Borrower Eligibility Requirements</a></span>, are often chosen as a means to avoid probate. However, similar arrangements do not qualify as life estates for loan eligibility purposes if:</p><ul style="box-sizing:border-box;margin-bottom:8px;padding:0px 0px 0px 40px;line-height:1.6"><li style="box-sizing:border-box">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</li><li style="box-sizing:border-box">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."</li></ul></blockquote></div></div><br class="gmail-Apple-interchange-newline"></div></div><br><div class="gmail_quote gmail_quote_container"><div dir="ltr" class="gmail_attr">On Wed, Nov 4, 2026 at 12:24 PM Zack Hofstad <<a href="mailto:zack@hofstadlaw.com">zack@hofstadlaw.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"><div dir="ltr"><div>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><div><br></div><div>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><div><br></div><div><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><div><br></div><div>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><div><br></div><span class="gmail_signature_prefix">-- </span><br><div dir="ltr" class="gmail_signature"><div dir="ltr">Zack Hofstad<div>Hofstad Law</div><div>4305 Lacey Blvd SE</div><div>Lacey, WA 98503</div><div>phone/fax:  <a href="tel:(360)%20515-7879" value="+13605157879" target="_blank">360.515.7879</a></div><div><br></div><div><span style="color:rgb(45,55,72);font-family:Roboto,sans-serif;font-size:x-small">**This is a transmission from the law firm of Hofstad Law, Co., and may contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify us immediately at our telephone number <a href="tel:(360)%20515-7879" value="+13605157879" target="_blank">360.515.7879</a>**</span></div></div></div></div>
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