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Renee

Michigan
549 Posts

Posted - 10/07/2012 :  04:42:40 AM  Show Profile  Visit Renee's Homepage  Reply with Quote
Joannie - yes, every state is different and the reasons why a spouse or title-interested non-borrower would sign/not sign involve a variety of laws.

In Michigan, for example:

Married women not vested on title are granted automatic title interest in the marital residence via Dower Rights. Men are not, since Courtesy Rights (which granted married men the same automatic title interest) were abolished.

HOWEVER ... Michigan also grants both gender of spouses, whether title-vested or not, Homestead Rights to their primary residence.

Michigan does not recognize any rights of any spouse not vested on the W/Deed for a purchase - only on a refinance.

On top of that, you have individual Underwriters and Lenders who can/may impose their own requirements for joinder, as I'd described earlier. My understanding of U/W's often requiring married/non-title vested MEN to sign involves an unwillingness to open a gender-discrimination pandora's box.

Non-borrowers (whether a spouse or other title-vested person) who sign a Mtg/DOT are subordinating whatever title rights they have, to the Lender.

The FDIC requires (by Federal law) that any person who has title interest in primary residence property be provided the RTC and TIL. This nearly always equates to anyone signing the Mtg/DOT being required to also sign the RTC & TIL.

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joannieh

Michigan
40 Posts

Posted - 10/07/2012 :  01:08:44 AM  Show Profile  Reply with Quote
One thing I haven't seen stated in any of this thread is WHY Non-borrowing spouses have to sign.
Non-Borrowing Spouses, on title or not, are signing the Deed of Trust to sing off their rights to the community property as the borrowing spouse has in case of default on the mortgage. Without a non-borrowing spouse would still have rights in many states in the event of foreclosure? And, for this purpose it doesn’t matter if it’s a spouse on Title or not.
Of course, each state is different. In Colorado Non-Titled spouses don't have to sign the spousal docs.

It's because they are signing off their rights to the property in case of default that they have the right to cancel and are required to sign the other several documents.

Another FYI. Most of the Spousal protection laws were put in place to keep a spouse from leveraging the spousal property in preparation for divorce. Get the money, hide it, run and leave the spouse with a property that's leveraged to the hilt. This happened a lot.

Joannie
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jerome111

California
6 Posts

Posted - 09/25/2012 :  12:55:31 PM  Show Profile  Reply with Quote
Thank you this is very helpful.
quote:
Originally posted by Renee

This should help clear up some of the questions in this thread, and I hope it will be helpful because the topic is very confusing but extremely important.

CA is a Community Property state – that in itself can be confusing. Understand that there are the laws of the state, and then there are those bearing the liability for the interpretation & application of those laws. Not all title insurance companies (i.e. underwriters) & not all lenders interpret the same exact way – and it is within their right to require signatures to whatever they deem necessary as a condition to providing the loan, insurance or closing process. This is why there is such a mix of ‘right ways’ in so many aspects of lending/title procedures.

That is the long form of my advice to never tread into the area of title interests with borrowers/buyers, but to seek advice from that particular title agent & follow the directives. Still, should something seem amiss or contrary to what you would normally see, a call to the title agent to confirm something is correct (i.e. how THEY want it to be) is best.

Just for cheap thrills and strictly in conversation-only mode – some U/W’s (Stewart, for one) require the assumption that any property acquired by a married person is Community Property, (regardless of prior Spousal Grant Deeds), which then requires acknowledgement by the spouse on the DOT. This protects them from liability in the event that a ‘sole & separate’ state of the property is either misunderstood, not correctly documented or is ultimately challenged.

Further, CA also provides for Homestead Rights, which (again, using Stewart as an example) can be satisfied by having the spouse (or other titled/non-borrowing person) acknowledge the DOT.

Since most lenders use the Fannie/Freddie DOT, you can point out Chapter 13 to most non-borrowing signers who question you about their signature being required, and it will usually suffice (this was cut/pasted from the CA version):


13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower’s obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a “co-signer”): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer’s interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer’s consent.


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Renee

Michigan
549 Posts

Posted - 09/25/2012 :  04:32:11 AM  Show Profile  Visit Renee's Homepage  Reply with Quote
This should help clear up some of the questions in this thread, and I hope it will be helpful because the topic is very confusing but extremely important.

CA is a Community Property state – that in itself can be confusing. Understand that there are the laws of the state, and then there are those bearing the liability for the interpretation & application of those laws. Not all title insurance companies (i.e. underwriters) & not all lenders interpret the same exact way – and it is within their right to require signatures to whatever they deem necessary as a condition to providing the loan, insurance or closing process. This is why there is such a mix of ‘right ways’ in so many aspects of lending/title procedures.

That is the long form of my advice to never tread into the area of title interests with borrowers/buyers, but to seek advice from that particular title agent & follow the directives. Still, should something seem amiss or contrary to what you would normally see, a call to the title agent to confirm something is correct (i.e. how THEY want it to be) is best.

Just for cheap thrills and strictly in conversation-only mode – some U/W’s (Stewart, for one) require the assumption that any property acquired by a married person is Community Property, (regardless of prior Spousal Grant Deeds), which then requires acknowledgement by the spouse on the DOT. This protects them from liability in the event that a ‘sole & separate’ state of the property is either misunderstood, not correctly documented or is ultimately challenged.

Further, CA also provides for Homestead Rights, which (again, using Stewart as an example) can be satisfied by having the spouse (or other titled/non-borrowing person) acknowledge the DOT.

Since most lenders use the Fannie/Freddie DOT, you can point out Chapter 13 to most non-borrowing signers who question you about their signature being required, and it will usually suffice (this was cut/pasted from the CA version):


13. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower’s obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a “co-signer”): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer’s interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer’s consent.
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servicio

Tennessee
3 Posts

Posted - 09/24/2012 :  6:29:16 PM  Show Profile  Reply with Quote
When being from a Community property state... I just try to explain it in more laymen's terms that the spouse is giving permission/acknowledgment that by their signature (of non-titling spouse) they have knowledge of the loan/purchase of the property and are agreeing not to be a named titled owner.
I had one of my first 10 signings where the borrower told their LO that they were never married but when I arrived his wife answered the door, did not speak English, as I began the signing I asked in Spanish if he was legally married he said, yes (she was standing right beside him). I stopped the signing and called the LO. The LO agreed that the docs would have to be redone. However, I was not the one called back to do them, I wonder why?

Notaries Galor
Servicio Int'l
866-400-5342
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jerome111

California
6 Posts

Posted - 08/30/2012 :  3:00:29 PM  Show Profile  Reply with Quote
That's a good point. The vesting is written out on the first page of the Deed. So an additional signature by a non-title spouse would not change the vesting which is how title of the property is held. So in a way the non-title spouse is signing the Deed as merely an acknowledgement that there is a loan on the property?
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apaloosa

54 Posts

Posted - 08/30/2012 :  1:04:16 PM  Show Profile  Visit apaloosa's Homepage  Reply with Quote
I have heard that the first line on the Deed that has the borrowers name in it is how they will hold title to the property.
The non borrowing spouses' name should not be on there.

I know this may be a legal explanation so don't know how to tell the borrower. Anyone have a suggestion for that?

Apaloosa
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jerome111

California
6 Posts

Posted - 08/30/2012 :  06:10:39 AM  Show Profile  Reply with Quote
Luckily I haven't encountered this lately. The borrower's holding title as "married sole and separate" have had their spouse's sign a Quit Claim Deed.

Any suggestions for when I encounter this again?
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jrobert789

California
28 Posts

Posted - 08/30/2012 :  05:01:54 AM  Show Profile  Visit jrobert789's Homepage  Reply with Quote
Yes, these types of cases cause lots of problem. It's difficult to define the proper thing to spouse. Arguments will defeat you if you are not able to define in proper way.
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jerome111

California
6 Posts

Posted - 07/17/2012 :  3:18:49 PM  Show Profile  Reply with Quote
Just encountered this for the first time. Spouse was not on loan or on title but lender was requesting that the "non title spouse" sign the Deed of Trust, Right to Cancel, Truth In Lending, Itemization of Amt Financed, and Correction and Fees Agreement. The "non title spouse" did not want to sign the Deed of Trust because she was not on title and did not want to be on title. I called the title company and we were told because we are in a Community property state that the "non title spouse" needs to sign the security instrument. This doesn't give the "non title spouse" title to the property. So it's very similar to the "non applicant/borrower spouse", except that the "non applicant/borrower spouse" is on title and the "non title spouse" is not. Yet both are required to sign the Security Instrument.
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