Indemnity deed of trust - is it a good idea?

[Phillip S.]

Question for anyone who may know the ins and outs of this. I'm in the process of doing a blanket refi on two of my properties that are owned by my LLC. The bank is setting it up as a commercial loan where the LLC is the borrower and I am the guarantor. My loan officer suggested that I can avoid the county recordation tax (approx. $1200) by doing what's called an "Indemnity Deed of Trust" (IDOT), where I basically become the legal borrower IF the entity defaults. Since the debt has not yet been incurred there is no recordation tax due. Apparently this is a loophole in Maryland law that allows people to avoid the tax. The question I have is what are the drawbacks of this, if any? One question I already asked is whether the debt can stay off my personal credit report if I go this route. Still waiting on the bank for an answer.