Friday, October 07, 2011

Jan is curious.

I know someone that recently borrowed against a home his mother owns and has title to.  The father is deceased.
The son has been living in the home for many years.  Even while the father was still alive.  Now they have found it necessary to
borrow against the home’s equity, I’m sure that’s due to the mother’s old age illnesses and the son’s inability to work.   They
borrowed over $86,000.00.  In reading the mortgage note, the SON signed as a“non vested spouse”.  How can this be if he is the son? 
Is that legal?  I also noticed that the note was notarized by a long time friend of the family and the witnesses are neighbors.  The lender
is from out of state.  The notary knows for a fact that this man is this woman’s SON and not her spouse.  What do you think is going on????



Hi, Jan:  It's hard to say whether there was an intention to defraud the lender.  Often people don't read documents.  Even if the lender knew the correct circumstances, they may have made an error in the preparation of the final Note.  If the title agent or notary isn't doing a good job of checking documents they may not notice it.  Since the son isn't working, I doubt that the lender used his financial strength to approve the loan.  He isn't vested in title and so his permission isn't needed to create a lien.  His position - in my opinion as a non-attorney blogging title insurance agent - by being on the paperwork is more of a personal guarantor.   Why the lender added him I don't know but they may have had a reason that is not discoverable by public record.


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