Friday, March 07, 2008

what are lender's rights if the spouse doesn't sign a mortgage

The lender must determine whether or not the signature of the spouse is required to validate the mortgage lien. If the lien is imperfect without the signature, the lender should decline the loan.

If the transaction has already closed and you, as lender, find that your lien is imperfect because the spouse did not sign the mortgage, I hope you have a loan policy.


Anonymous said...

I've had a few spats where the husband didn't know the wife had to sign. I remember one closing delayed nearly two weeks because a fight erupted.

Diane Cipa said...

I'm glad you raised that issue, Anon, because it behooves loan originators to know the rules in their state.

Take a few minutes to chat with your favorite title professional and find out if non-vested spouses must join in purchase or refinance transactions.

In Pennsylvania, we no longer have dower rights, so married individuals can purchase property without their spouse. The purchase money mortgage is not subject to marital rights.

It's different in a refinance as our divorce laws allow for marital claims against the equity or appreciation of real estate.

Knowing these rules and discussing the situation up front with the borrower may help with those last minute snafus.

We had a crazy refi last week. the borrower's wife was in Serbia of all places and while we could e-mail her the mortgage, TIL and RTC - with copies - the embassy had been bombed and she couldn't get the seal of an American consulate. She ended up with a Serbian notary and had to have the acknowledgment translated into Serbian. We received TWO acknowledgments with notarial seals, one in Serbian and the other in English.

Wine Dog said...

We had one out here where the wife forged a POA for the husband, who was a drunk. She rolled the financing three times to cover her shopping sprees before she couldn't make the payments any more. We bought the loan from WFB (policy settlement) and foreclosed. ONLY THEN did the husband sober up and get an attorney. We ended up selling the house back to them essentially at a number that unwound the whole mess. I went up to the house with the CTO at the time, it was weird to walk around the place.