The mortgagor described in the mortgage should be the party that holds title to the property. If the property is held in a living trust, the mortgagor would be listed in the name of the trust (e.g., “Jen Test Revocable Living Trust dated 1/1/18”), and the trustee would sign the mortgage on behalf of the trust (in your example, “Jen Test, as the Trustee). Similarly, the deed to a property held in trust should list the trust as the owner (here again, “Jen Test Revocable Living Trust dated 1/1/18”).

However, if the mortgaged property is not held in the trust, the mortgage should reflect the party holding title to the property as the mortgagor (e.g., “Jen Test”).

Regarding your second question, we believe you should input the individual beneficiaries for both living trusts and land trusts in your loan documentation system when a consumer purpose loan is extended to a trust. Under Regulation Z, a loan extended to a living trust or a land trust for a consumer purpose is considered to be made to a natural person. Accordingly, your loan documentation system likely requires that you input the trust’s natural person beneficiaries in such circumstances, since they may be entitled to the Truth in Lending Act’s mandated disclosures and the right of rescission. For example, if a security interest is being taken in the principal dwelling of the beneficiary of a living trust or a land trust, the beneficiary may be entitled to rescind the transaction (assuming certain exceptions do not apply).

For resources related to our guidance, please see:

• Conveyances Act, 765 ILCS 5/11(a) (“Mortgages of lands may be substantially in the following form: The Mortgagor (here insert name or names), mortgages and warrants to (here insert name or names of mortgagee or mortgagees), to secure the payment of (here recite the nature and amount of indebtedness, showing when due and the rate of interest, and whether secured by note or otherwise), the following described real estate (here insert description thereof), situated in the County of …., in the State of Illinois. Dated (insert date). (signature of mortgagor or mortgagors)”)

• Regulation Z, Official Interpretations, Paragraph 2(a)(11), Comment 3 (“Credit extended to trusts established for tax or estate planning purposes or to land trusts, as described in comment 3(a)-10, is considered to be extended to a natural person for purposes of the definition of consumer.”)

• Regulation Z, Official Interpretations, Paragraph 3(a), Comment 10(i) (“In some instances, a creditor may extend credit for consumer purposes to a trust that a consumer has created for tax or estate planning purposes (or both). Consumers sometimes place their assets in trust, with themselves or themselves and their families or other prospective heirs as beneficiaries, to obtain certain tax benefits and to facilitate the future administration of their estates. During their lifetimes, however, such consumers may continue to use the assets and/or income of such trusts as their property. A creditor extending credit to finance the acquisition of, for example, a consumer's dwelling that is held in such a trust, or to refinance existing debt secured by such a dwelling, may prepare the note, security instrument, and similar loan documents for execution by a trustee, rather than the beneficiaries of the trust. Regardless of the capacity or capacities in which the loan documents are executed, assuming the transaction is primarily for personal, family, or household purposes, the transaction is subject to the regulation because in substance (if not form) consumer credit is being extended.”)

• Regulation Z, Official Interpretations, Paragraph 3(a), Comment 10(ii) (“In some jurisdictions, a financial institution financing a residential real estate transaction for an individual uses a land trust mechanism. Title to the property is conveyed to the land trust for which the financial institution itself is trustee. The underlying installment note is executed by the financial institution in its capacity as trustee and payment is secured by a trust deed, reflecting title in the financial institution as trustee. In some instances, the consumer executes a personal guaranty of the indebtedness. The note provides that it is payable only out of the property specifically described in the trust deed and that the trustee has no personal liability on the note. Assuming the transactions are primarily for personal, family, or household purposes, these transactions are subject to the regulation because in substance (if not form) consumer credit is being extended.”)

• Regulation Z, 12 CFR 1026.2(a)(11) (“Consumer means a cardholder or natural person to whom consumer credit is offered or extended. However, for purposes of rescission under §§ 1026.15 and 1026.23, the term also includes a natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person's ownership interest in the dwelling is or will be subject to the security interest.”)

• Regulation Z, 12 CFR 1026.2(a)(22) (Person means a natural person or an organization, including a . . . trust . . . .”)
   
• Regulation Z, 12 CFR 1026.23(a) (“In a credit transaction in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction, except for transactions described in paragraph (f) of this section. . . .”)