Buyer's lender is requesting sellers LLC operating agreement

[YiBing T.]

Hello BP, My wife and I are flipping our first house. The house is in the name is a LLC. The buyer mortgage company is requesting us to provide them the operating agreement of the LLC. I can understand if this request is coming from the title company, but not sure why would mortgage company cares about who the seller is. The lender also said if LLC members include other LLCs, they want to see the member operating agreements as well. This is a little conflicting to the purpose of an LLC which is for legal and privacy. What if or investor doesn't want to be known? What are my options? How to respond to them if we don't want to provide members information? Has anyone encounter this situation before? Thanks in advance

[Tom Gimer]

If privacy is now the goal, provide something the parties and lenders can rely upon to reduce or eliminate liability... such as an LLC certificate identifying and signed by all members and including a resolution appointing an authorized signatory, plus an indemnity to anyone relying upon it. You could also redact any non-public personal information from any documents provided or disclose only to parties -- such as lender's attorney -- who agree to keep the information confidential.

The lender is simply attempting to make sure the deed and contract are valid and enforceable.

LLCs are not designed for privacy of the owners/beneficiaries. If that was the primary goal a trust would seem to have been a better choice.