Scenario: Wife and husband create a LLC. Home purchased(by loan from mother), note and mortgage filed in name of the LLC (with husband and wife as only members). Now wife and husband want to refinance the home loan into their personal names, but keep the deed in the name of the LLC. As the Bank, I'm concerned because collateral isn't tied to the individual. Another concern is if the LLC's operating agreement (which I doubt exists) allows company owned assets to be pledged to secure the loan of the members. Do other banks do this? What kinds of issues have they encountered?

All legitimate concerns that you should sit down and discuss with your legal counsel.

Thanks rlcarey!

Ask counsel how to structure the deal. First, it is not unheard of for an LLC to be used to hold property, even a home. Second, the individuals can and should be required to guaranty just as with a trust. Third, does your state require an operating agreement?