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Can You Get a Reverse Mortgage on a Property Held in a Land Trust?

by Randy Hughes, Mr. Land Trust on February 10, 2018

 Can You Get a Reverse Mortgage on a Property Held in a Land Trust?

A reverse mortgage is a loan that allows seniors to convert home equity into cash. Most people think that you can not get a reverse mortgage if the property is held in a land trust. However, it has been done much to the disappointment of the lender. Here is a case-in-point:

Fin. Freedom Acquisition, LLC v. Standard Bank & Tr. Co., 2015 IL 117950.


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Privacy, Land Trusts and the 4th of July

by Randy Hughes, Mr. Land Trust on July 02, 2017

                                   Privacy, Land Trusts and the 4th of July
                                       By Randy Hughes, Mr. Land Trust
The 4th of July is the birthday of America. Each July I think about our forefathers and what they envisioned for the new nation they created. John Adams and Thomas Jefferson were both US Presidents around the beginning of the 1800’s that were concerned about the boundaries of government and the freedoms of its citizens (coincidentally, both Adams and Jefferson died on the same day . . . July 4th, 1826).
Our Founding fathers could have never dreamed about modern day technology and how it subverts our personal privacy. But, one thing is for sure, they would not have wanted us to give out as much personal information as we have all been trained to do.
Land Trusts are great for keeping private information (real estate ownership) private. Land Trusts have been used for over 500 years to protect individual ownership and prevent theft of property from deadbeats and their lawyers.
Over 100 years ago, Land Trusts were brought to America and verified as legal entities through thousands of legal decisions in the courts of primarily Massachusetts and Illinois. Today, Land Trusts are used in almost every state (sometimes known as “title holding trusts,” “real estate trusts” or “common law trusts”) to help protect property owners from frivolous lawsuits and the public in general.
In 1969, I started buying single family homes for investment. After a few years of acquiring property, I became concerned about having my name on the title to property and what “surprises” this might bring. Frequently I heard about property owners that were sued for what seemed to be frivolous reasons. Soon I learned that people who own real estate are “the enemy” and are perceived to have huge amounts of money (or equity) of which is coveted by attorneys and their clients (who are not interested in working for a living).
It seemed logical to start thinking like our forefathers. Adams and Jefferson were intensely private men that wanted our government to only provide security for the new United States and to leave the citizens alone in all other respects. These two past presidents also felt that citizens should be protected from each other via the constitution and the legal system.

Anyone who has read the Patriot Act knows how far we have come from Adam’s and Jefferson’s hopes for a non-intrusive government (and how our legal system has run amuck). But, I am not a fatalist. I believe where there is a will there is a way and that is why I believe so strongly in the benefits of using Land Trusts to be more private and to control personal information.
Land Trusts have been used for a long time to conceal and control property. The advantages are many and the disadvantages are few. No one should own property in their own personal name and a Land Trust helps accomplish this goal.
After over 40-plus years of investing (and 35-plus years of using Land Trusts) I have learned a few privacy and asset protection lessons. Among the most important lessons are:

1. Don’t be a partner with anyone
2. Don’t brag about your assets or income
3. Own nothing, control everything (use a Land Trust)
4. Believe half of what you hear
5. Under promise and over deliver
6. Honor your commitments
7. Sacrifice everything to pay your lenders
8. The legal system is not “fair”
9. Luck is where opportunity meets preparation
10. Hard work = results

As you relax and enjoy 4th of July, appreciate all that you have and the wonderful country that you live in. And your ability to use a Land Trust to own real estate!


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Land Trusts and the Garn-St. Germain Act

by Randy Hughes, Mr. Land Trust on June 08, 2017

 Land Trusts and the Garn-St. Germain Act
I get a lot of questions about the inter-relationship between Land Trusts and the Garn-St. Germain Depository Institutions Act of 1982. Signed by President Ronald Reagan in October 1982, the Act aimed to ease pressures on depository institutions as the Fed raised interest rates to curb the high inflation of the 1970s. For a detailed explanation of this Act go to:  

The question I usually receive is, "Can I put my personal residence into a Land Trust without triggering the Due On Sale Clause in my note" (that is secured by the mortage on my property)? The short answer is "Yes."

One of the purposes of the Garn Act was to allow all Americans to put their property into a trust for estate planning reasons (without fear of causing their loan to be called "due" by an insecure lender). The Act allow a homeowner (up to four units in a single building) to transfer the title of their property into a Revocable Trust without fear of loan accelleration by their lender. 

Please note that you CANNOT put your personal residence into a Irrevocable Trust. Garn does NOT apply to Irrevocable Trusts.



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Using a Power of Attorney With a Land Trust

by Randy Hughes, Mr. Land Trust on March 05, 2017

 Using a Power of Attorney With a Land Trust

A Power of Attorney (POA) is the written authority for an "agent" to act on behalf of someone else. This means that if you need to get something done while you are out-of-town or incapacitated in some way, you can still reach your goals.

I have used a POA mostly for real estate transactions. Since I put each property into its own separate Land Trust, it is convenient to have a signed POA when my Trustee lives out-of-state. 

Since I use mostly Trustees from other states (not where I live nor where the property is located), I will have my Trustee sign the Trustee's Deed, HUD-1, Termite Report, etc. prior to closing the transaction (this prevents my Trustee from having to attend the actual closing). In addition I may have my Trusee sign a POA to my attorney (or me, but not usually) giving him authority to sign any last minute documents that appear at the closing table.

It is also possible (using this POA form) to have my attorney sign ALL documents (including the Trustee's Deed) on behalf of my Trustee. 

The POA can be issued for an indefinite period of time or limited by time or circumstance. If you would like to see a typical POA form, Google..."Illinois statutory form power of attorney for property."


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She Regretted Not Using a Land Trust

by Randy Hughes, Mr. Land Trust on December 07, 2016

 She Regretted Not Using a Land Trust
Last night I spoke to a group of real estate investors about the many benefits to using a Land Trust. After my speech, a lady came up to me and said she sure wished she had used a Land Trust to hold title to her personal residence. Of course, I asked, why?

She went on to explain that she had some financial difficulties left over from the crash of 2008 and a creditor was pressuring her to pay her debt in full. The creditor looked her up online and found out the value of her house and approximately how much debt was secured against the house. By doing this, the creditor approximated how much equity she had. The creditor called her up, cited the information he had determined and said, "Don't tell me you cannot pay me off because I know how much equity you have in your home!"

The lady went on to tell me that if she had owned her home in a Land Trust the creditor would not have been able to determine her home's equity and she would have had a better negotiating ability. As it turned out, she was "had."

Of course, she didn't tell me anything I didn't already know, but it is always nice to hear the Land Trust advantages from someone else! Too bad some people are not proactive with their real estate protection and wait too long to act. Don't let this happen to you! Use a Land Trust, now!


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