Ask Me Corner:

When a property is vested in a trust, corporation, or LLC, verifying proper authority is essential for both loan enforceability and investor protection. We asked two CMA lenders to share what documents they prefer to collect and who should review them.

Mayumi Bowers, Val-Chris Investments

Trusts

  • Copy of Trust or Trust Certification

Limited Liability Companies (LLCs)

  1. Operating Agreement
  2. Articles of Incorporation
  3. Tax EIN

Corporations

  1. Articles of Incorporation
  2. Corporate Bylaws
  3. Certificate of Good Standing
  4. Corporate Resolution authorizing the transaction
  5. Statement of Information
  6. Proof the corporation is authorized to do business in the property’s state

Who Reviews the Documents?

  • The loan underwriter

Karen Gledich, Residential First Capital

At Residential First Capital, our focus is to verify authority, confirm entity validity, and ensure the signer is properly empowered to encumber the property.

Trusts

  • Trust Certification
  • Pages showing trustee and successor trustee
  • Any amendments or restatements
  • We also ensure the trustee signing the loan documents matches vesting and has clear authority to borrow.

Limited Liability Companies (LLCs)

  • Articles of Organization
  • Operating Agreement
  • Statement of Information
  • Borrowing or Member Resolution
  • EIN confirmation
  • We also review management structure and borrowing restrictions.

Corporations

  • Articles of Incorporation
  • Bylaws
  • Statement of Information
  • Certificate of Good Standing
  • Corporate Resolution
  • EIN confirmation
  • We also confirm the corporation is authorized to conduct business in the state where the property is located.

Who Reviews the Documents?

  • Both the loan underwriter and title/escrow review the entity documents. This dual-review approach ensures proper authority, accurate vesting, and a clean, insurable transaction.

Next Month’s Question

If all or a portion of the loan proceeds pay off a HELOC or 2nd on the borrower’s home, how do you document that the prior loan was business purpose? CMA Member Participation Welcome!

If you’d like to submit your answer for next month’s newsletter, please email Mayumi Bowers at mayumibowers@gmail.com.