Posted by NVLSlady/VA on 5/20/13 12:53pm
Msg #470585

Marital (Spousal) States (sorry, I know it's been discussed)

I'm grappling with that "pesky" paragraph top of 1003. Too many clauses (and with diff meanings) and I'm Lost!

I've researched here and online trying to wrap my mind around the marital property state issue for VA (not on list of the 9); I guess what I don't understand is: If the non-titled spouse's only interest in the property - prim residence - is by virtue of marriage or homestead rights, does she have the same requirements as a non-borrowing spouses in "marital property states?"

If the spouse is actually vested on Title, then he or she signs all the collateral (non-ob) docs because the property is in a marital state, right? So, wouldn't she need to sign "co-borrower" line on the top of 1003 -- as a NON-BORROWING spouse WITH community property rights?

1003 wording: This application is designed to be completed by the applicant(s) with the Lender’s assistance. Applicants should complete this form as “Borrower” or “Co-Borrower,” as applicable. Co-Borrower information must also be provided (and the appropriate box checked) when the income or assets of a person other than the Borrower (including the Borrower’s spouse) will be used as a basis for loan qualification or the income or assets of the Borrower’s spouse or other person who has community property or similar rights pursuant to applicable state law will not be used as a basis for loan qualification, but his or her liabilities must be considered because the spouse or other person who has community property or similar rights and the Borrower resides in a community property state, the security property is located in a community property state, or the Borrower is relying on other property located in a community property state as a basis for repayment of the loan.

If this is an application for joint credit, Borrower and Co-Borrower each agree that we intend to apply for joint credit
(sign below):
________________________________ __________________________________________

Reply by Barb25 on 5/20/13 1:06pm
Msg #470586

I found this. Does it help?

http://www.meridianhm.com/spousal-states-and-community-property-states

Reply by Barb25 on 5/20/13 1:07pm
Msg #470587

Re: I found this. Does it help?

List all the way at the bottom of article.

Reply by JanetK_CA on 5/20/13 6:55pm
Msg #470653

Re: I found this. Does it help?

I thought it was interesting that they talk about the implications regarding payback of the loan, but there's no mention of any potential consequences to the non-borrowing spouse if something happens to the partner on the Note, like whether or not they will be able to assume the payments or if they will be forced to sell the home. That's another technical legal question for us to stay out of, but I would think it's one of very significant importance that few people have probably thought about.

Reply by NVLSlady/VA on 5/20/13 10:08pm
Msg #470668

Re: Assumability

Yes, and I would think this would be a real issue in same-sex marital states. As you say, the implications of not knowing the law (or UPL for that matter) related to this issue is huge in my mind.

Reply by Linda Hubbell on 5/20/13 1:13pm
Msg #470588

"If the spouse is actually vested on Title, then he or she signs all the collateral (non-ob) docs because the property is in a marital state, right? So, wouldn't she need to sign "co-borrower" line on the top of 1003 -- as a NON-BORROWING spouse WITH community property rights?"

In a nutshell - no. She has to sign all the collateral docs because she's pledging the collateral to secure the loan. She is only allowing a lien to be placed on property in which she has a vested interest. She is NOT a co-borrower because she's not on the note - therefore no, she does not sign the 1003.

Reply by NVLSlady/VA on 5/20/13 1:45pm
Msg #470600

Thank you both!

Also the chart referenced categorized spousal vs. comm prop; I think that is where Most of my confusion is from - not really knowing the difference (and using them interchangeably/incorrectly).

No, nb spouse is not a co-borrower But has spousal rights (and that's why I thought VA should be on that list ?) According to the wording in the 1003 par, one with "community property" rights signs

Reply by MW/VA on 5/20/13 2:54pm
Msg #470619

Exactly, Linda. We routinely have everyone sign the top

line of the 1003, but technically that isn't correct unless it's a joint application.
BTW, VA is a spousal rights state, and the spouse would have rights even if not on title. It's a question as to whether it's "marital property" or not.

Reply by NVLSlady/VA on 5/20/13 3:04pm
Msg #470625

Re: Exactly, Linda. We routinely have everyone sign the top

and it's that "technicality" that gets the better of me (and bugs the . . . ). Never mind.

Anyway, thanks, Marilyn for confirming about our spousal rights status. Do you have it printed somewhere?

Reply by MW/VA on 5/21/13 9:42am
Msg #470704

No, I don't have anything printed--just personal knowledge. n/m

Reply by Barb25 on 5/21/13 10:41am
Msg #470712

Re: Exactly, Linda. We routinely have everyone sign the top

That link I posted might give you the info you need along with spousal states.

Reply by Barb25 on 5/20/13 1:22pm
Msg #470590

LOL. Well I guess it would have helped if I read the comment

as well as the subject line. But at least you not only have your answer, you now have a list of all the community property states as well as the spousal states in the United States.