The exemption exists and it's narrower than the pitch. Garn-St Germain preempts state limits on due-on-sale enforcement and then carves out situations where a lender can't accelerate, one of which is a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property. Both halves matter. Assigning the beneficial interest to you and taking possession and rents is exactly a transfer of rights of occupancy, and the borrower stopping being the beneficiary defeats the other half. How a particular court would read your particular documents depends on the facts and on state law, so that's a question for your attorney to answer in writing rather than a structural certainty anyone here can give you.
Separately, what quill said is the practical reality. Servicers don't audit trust agreements. Loans get noticed through a change of the named insured on the hazard policy, a change of mailing address, a payoff or subordination request, an escrow refund check that bounces back, or a tax bill going somewhere new. The trust doesn't quiet any of those.
Two further things the trust does not do. It doesn't remove the seller's name from the note, so her credit and her debt-to-income ratio carry this loan for as long as it exists. And it doesn't disappear at your exit. When you refinance or sell, a title examiner reads the chain, sees the assignment of beneficial interest, and any new lender underwrites the transfer that already happened.
On your numbers the spread is worth something like $650 a month against a 7% loan, which is why people build the structure. Price the trust as documentation of what you did, not as protection from it.
