Jerry Taylor explains that the Garn-St. Germain Act lets you transfer a mortgaged home into a living trust without notifying your lender. Lenders can't enforce due-on-sale clauses for this type of transfer, though Taylor recommends telling them anyway to keep things smooth.
Do you have to inform your mortgage company when you put your home into a trust? The answer to that is technically no, but I suggest contacting them anyway and just letting them know that you are putting your home into a trust. There is federal law that requires them to allow you to do that, to put your home into a living trust, and the law states that they cannot enforce their due-on-sale clause because you are putting it in a trust. So if It is common for mortgaged homes to be put in trusts. I do suggest that people contact the mortgage company and just let them know what you're doing so they aren't caught off guard by it. But the federal law that allows this was passed back in the early '80s, I believe. It's called the Garn-St. Germain Act, G-A-R-N-St. Germain Act. That's federal law.
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