Posted by AngelinaAZ on 3/2/06 5:59pm
Msg #101475

Implications of wife not signing Title Docs?

Going over paperwork... 1003 says married... DOT says Mr. Borrower (not sole and separate, not single or married... just the name). His wife is not listed on anything. This is an out of state Lender and Out of State TC (maybe not familiar with AZ community property status) so I call the TC and verifiy that NobS should sign DOT,TIL,RTC. They look into it and say... 'What... he's married??? YES the wife needs to sign. Please add her to the 1st page of the DOT and have her sign that and the RTC and the TIL.' I say OK. So I call MR. B and let him know his wife needs to be there and has to sign a few things. Then, as instructed by the TC, I call the Lender to get instructions on how they want me to handle changes on the DOT. The Lender says... I don't care what the TC says... she's not on Title now and she won't be. Just ignore her and don't have her sign a thing.

As I understand it.... in a community property state... if you enter the marraige with the property you can maintain it as sole and separate BUT there is some sort of disclaimer that the spouse needs to sign if you re-fi. If he re-fi's without getting this done... doesn't it TECHNICALLY turn into property aquired during the marraige.

Am I crazy? Does anybody know the implications for the borrower?

Reply by RayC_TX on 3/2/06 6:06pm
Msg #101478

Look a few threads down .....

I had a Husband that wanted to play lawyer, I knew she was supposed to have signed, he pitched a fit and said NO NO NO ....

Long verse short story: I had to go hunt them down and get her to sign......

The technical issue "in TEXAS" is our laws, I think Brenda pretty well summed it up, even if the husband is on the note ... if there is a spouse involved .... state law <in a nutshell> wants to make sure no body is left homeless <--------- a B.TX™

The type loan it was I had signed before but never ran into a problem of an ANALHUSBAND.
Got it squared away to day.

Ansewer to your question: Take a quick look over the State Laws & Requirements...

Reply by Charles_Ca on 3/2/06 6:12pm
Msg #101481

Hi Angelina:

California is a community property State but if one or the other has their own seperate propoerty then it stays their own and serperate property unles the other spouse can prove that their combined income was included then if the situation gets difficult the courts will decidde the p

Reply by Charles_Ca on 3/2/06 6:16pm
Msg #101483

I don't know what happened bu that was partial and raw, but

I was going to add that the income needs to be their own and separate income. If they keep their own property and keep their own income and contribute to common expenses they can keep the property separate. Once things become commingled they are community property. I suppose if you can do cost segregation for IRS purposes then this shouldn't be anymore difficult!

Reply by AngelinaAZ on 3/2/06 6:29pm
Msg #101492

Re: I don't know what happened bu that was partial and raw, but

So technically she doesn't have to sign anything? I have always been given a disclaimer 'at the least' that the wife signs acknowledging that it is his sole and separate property.

Reply by TitleGalCA on 3/2/06 6:36pm
Msg #101495

Hi Angelina, if the DOT shows Mr. Borrower only (not sole and separate) it's okay - the method of holding title doesn't have to be on the document unless lender wants it that way. When ever I've had either a signing, or insured a refinance, I've never seen wife sign ANYTHING (unless it was an interspousal or quitclaim deed). I've yet had direction to have the Nobs sign. What the lender said sounds like status quo to me. Just my experience.

For me, I don't ever worry about the technicalities of property that was acquired sole and separate...and what it may or may not become later down the road, generally lender already has requirements (that meet my requirements) for issuance of title insurance. (I'm wearing both my title hat and signing hat here)

You did right by having the title company contact the lender - I'd never trust what the title company said in a situation like this...it's lender that I care about.

Reply by AngelinaAZ on 3/2/06 6:42pm
Msg #101496

SUPER... thanks all for the advice!!!!!!!!!!! n/m

Reply by Anonymous on 3/2/06 8:27pm
Msg #101521

Re: SUPER... thanks all for the advice!!!!!!!!!!!

Hi Angelina and the rest of you here,

I didn't really mean to post anonymously here. I have lurked here a few times and know how much you guys hate it. But it was the only choice other than revealing my full company name and department. So, for the record, my name is Pat and I work for a Chicago area title company.

I am chiming in here to offer a little bit of information about homestead rights. The reason a non-borrowing, non-titled spouse signs the mortgage/deed of trust is to waive homestead rights in favor of the lender. In many states, if the spouse does not sign to waive these rights when mortgaging the primary residence, the lien is not enforcible against both parties. That means that if the lien is forclosed, somebody will have to pay the spouse a sum of money to be evicted (homestead exemptions vary by state). I am not an attorney, and don't know much about Arizona, so don't go on my word. But it may do you some good to learn your state's procedure from somebody who practices in your state. The person from California may be very smart, but I would guess her expertise is limited to California (sorry about that, if I'm wrong).

If the non-borrowing spouse has homestead rights and does not sign the deed of trust, the title company could be on the hook for the amount of the homestead exemption in the event of forclosure. That is, unless the lender accepts the title policy with an exception as to the homestead rights, in which case the lender may be liable for the loss. It can be a very big loss. I would guess that the lender either knew the details (title held "sole and separate", for example) or you spoke to a clerk who was clueless about title insurance and the possible risk he/she may have been causing.

Nice to meet y'all, sorry about the lengthy post.

Reply by Charles_Ca on 3/2/06 9:10pm
Msg #101522

Pardon me for chiming in here but...

Yes the person from California is very smart and she is a title officer for a major title company in a major metropolitan market. I suspect that her expertise is primarily in California but I am curious as to why you would make a point of it here. After all by your very own admission you state that your expertise is not in Arizona either. Additionally you did not address the possibilities of separate property rights but skate off on a tangent regarding homesteading. I too am from California but I also invest in Arizona and we don't see a lot of homesteads there either again because of the problem with valuation. The homestead laws have not caught up with the property values here and don't really provide much protection. I am a real estate agent and I very rarely see homesteads in California and I do stay current and very active state-wide. I suspect that the metropolitan areas of Arizona are similarly devoid of homesteads because of the property values. But why comment on someone specific when you offer no more??? I'm not impugning your contribution just curious, inquiring minds want to know!!!!!!

Reply by TitleGalCA on 3/2/06 9:27pm
Msg #101526

Re: Pardon me for chiming in here but...

You're quite right Charles, homestead laws have not caught up with valuations - and frankly, most in California don't go into title with a large amount of equity, and in the case of foreclosure, that equity plays a part in considering homestead rights. It just doesn't happen here. For that and other underwriting decisions by the company I work for (taking into consideration the myriad of real estate law, foreclosure and community property rights) it's just not a problem for me in writing a policy of title insurance, especially when someone is going into title - a quitclaim deed is sufficient, and all the lenders I work with require that when an individual is going into title as married, sole and separate property. For the very few properties with a recorded homestead declaration in California, we are advised by underwriting to ignore it in almost all cases.

Still it's always nice to see others that can offer up information on title issues! I feel like the lone ranger at times.

Reply by Anonymous on 3/2/06 10:54pm
Msg #101545

Re: Pardon me for chiming in here but...

Hi Charles,

Pat here again. I'll try to answer your questions. First my comments about homestead rights were not a tangent, they were my point. In Illinois and other states, homestead rights are not dependent upon any declaration. The non-borrowing, non-titled spouse enjoys homestead rights, the rigtht to reside on the property, simply by virtue of being married to the owner and calling the place home. That right in Illinois is worth $7,500.00. Not a huge amount there, but all major underwriters insist on waiving of that right on the recorded security instrument nonetheless. The lien is flawed without waiver of homestead rights by the spouse.

The only reason I mentioned the title officer from California, and guessed that maybe her expertise was not in Arizona practice, is that I thought that Angelina might be wise to check with somebody who actually practices in Arizona. You will note, I hope, that I did not give Angelina an opinion either way as to the requirements regarding the spouse's signature. That's because, with all of the differences in state statutes, I don't believe that she would be any wiser accepting my opinion than anybody else's, excepting an expert in Arizona standard practice.

I hope that TitleGal is not offended. It was not my intent to question here knowledge or competence at all. And I think a thourough reading of my post would confirm that.

Reply by AngelinaAZ on 3/3/06 12:11am
Msg #101559

Re: Pardon me for chiming in here but...

Well... I'm back now and I sure hope I did the right thing.

The key factor here for me is this... my main concern is that Mr.B signs the docs and that I believe he has an understanding of what he is signing. Hence my concern over the NobS paperwork. I thought that I remembered hearing somewhere... that if you come into the marriage with property... in a community property state... you can keep it as your sole and separate property BUT... once you re-fi... you have to have the waiver of spousal rights included or the propery falls into a category of 'aquired during the marriage'. My concern was for the borrower. There was no quitclaim... no waiver... nothing.

As far as I'm concerned... and I don't mean to disrespect any Lenders or Title Companies out there... but they are making the borrower pay big money to search and insure the Title and if they are good on something... then who am I to argue? As long as they are not misleading the borrower to believe that 'this keeps things exactly as it was.' If the lender is OK... and I checked with all parties involved... with the homestead rights not secured in their (the lender's) favor... hey that's OK by me.

Is anybody following me here on this concept? I feel like I'm talking in circles.

Now to my last question... what kind of equity do you have to have to make the homestead thing come into play? AND (I suppose I should run a search for this) I thought that certain states are homestead states and certain states are community property states. Arizona, I KNOW, is a community property state. So why all the homestead talk? Is it that you have certain homestead rights... no matter what kind of state you are?

I'm gonna go look it up!

Reply by AngelinaAZ on 3/3/06 12:37am
Msg #101563

One last little Title question...

"a quitclaim deed is sufficient, and all the lenders I work with require that when an individual is going into title as married, sole and separate property"

Are you saying that it is mandatory to have a quitclaim... or that it is common, but ultimately the Lender's prerogative?

Reply by TitleGalCA on 3/3/06 9:02am
Msg #101628

Re: One last little Title question...

It is necessary for when someone goes into title as married sole and separate, to have the spouse sign a quitclaim deed. That's "going into title" not "refi-ing". For refi's later down the road, it may or may not be necessary depending on what's already in the chain, and lender reqs. I rarely see a situation where the lender doesn't already have my best interest at heart and is already requireing what I need to insure the transaction.

Lenders tend to run the show!

Reply by TitleGalCA on 3/3/06 8:56am
Msg #101623

Re: Pardon me for chiming in here but...

Angelina, you have always been one to get to the heart of the matter! Yet, warning and disclaimer...unless you want to be bored to tears and probably not end up with more information than you have now, the homestead and foreclosure topis is....boringgggggg.

Further, it's just not necessary for you to know, as a notary, your states foreclosure practices (in re: homesteads). What I wanted to get across to you in the first post was that you were right on by contacting the lender - they are the ones that need to indicate what you should and shouldn't have signed...remember they totally overruled the title company and said "don't have nobs sign anything!"

Of course, research the heck out of it if you like, it's just not a topic you'll get any info from unless you talk to the advisory title officer of the TC. Perhaps there was a quitclaim deed already in the chain of title, or perhaps lender just sent over revised instructions to TC to draw a quitclaim now that they know he is married...we don't know, and without knowing all this (which you won't) and you're not more of an expert in community property or title issues or lender underwriting practices...it's a difficult subject with a lot of variables.

If you like, I'll do some research on my own and email you My bet is that homestead issues are as much of a non-factor in AZ as in CA.

Reply by PAW on 3/3/06 9:40am
Msg #101654

Re: Pardon me for chiming in here but...

>>> My bet is that homestead issues are as much of a non-factor in AZ as in CA. <<<

From a Notary Signing Agent perspective, this is so absolutely correct. Even from a title perspective, it is pretty much correct too, as it is ultimately the lender's call how things get done.

I do find that even though the US Homestead Act was ultimately repealed (in 1977, I think), there are 20 or so states that have their own Homestead Acts in some form or shape. As an NSA, or even a title closer, I am not concerned whether or not the documents conform to a particular homestead states provisions. If I'm told that only John Doe is to sign, even though he is 'married' (which I cannot prove or disprove), so be it. Let the underwriters deal with any wrong information.

I may question it with the title company folks, but barring any contradiction to my instructions, the instructions stand and that's the way the job gets done.

Reply by AngelinaAZ on 3/3/06 10:13am
Msg #101668

To Title Gal and PAW...

Thanks for the info. With the signing... my main concern was:

1) That I was not notarizing something if I knew the borrower to be mislead and I beleived he did not understand what he was signing.

and...

2) That I covered my tush for the 'el cheapo' second trip that I could see was coming.

As far as the homestead stuff is concerned... I was curious 'just because'. It had nothing to do with being a notary. I like to know why things work the way they do behind the scenes. Seriously... if it's boooriiing... no need to Email. Someday I'll ask again when I know everything else interesting in the world.

Reply by TitleGalCA on 3/3/06 8:44am
Msg #101619

No Anon, not offended! n/m

Reply by Paul_IL on 3/3/06 12:00am
Msg #101558

Re: Pardon me for chiming in here but...

Charles,
I think the the anon poster was only pointing out that different states have different laws dealing with homestead. Your being a CA real estate broker has zero relevance to the posting as the property is in AZ. I hold brokers licenses in both IL and MO and am a Title Agent but that also is not relevant. What you suspect is also not relevent as you yourself point out. I think anon singled out Titlegal because of her screenname and it is known she works at a title company and was pointing out differences in state laws so that others would not take it as fact without first verifying their own state laws.

That was my take on anon's comment

Reply by Charles_Ca on 3/3/06 1:44am
Msg #101570

Topic was not homesteads! It was souses' signatures!

Realtors and real estate agents tend to run into homesteads, yes? And real estate agents need to be more concerned about homesteads than notaries, Hmmmm. But I still don't know why we are talking about homesteads when the original question was about whether it was mandatory that a spouse be a co-signer to the loan. Perhaps I need to go back and take remedial reading.

Reply by Paul_IL on 3/3/06 3:10am
Msg #101571

Re: Topic was not homesteads! It was spouses' signatures!

Actually the topic was on spouse being required to sign legals if not on the note. Homestead is one of the main reasons for that. Many especially those from FL confuse the different types of Homestead. Community property laws also differ from state to state and I have learned that LO's and out of state title companies are sometimes clueless. I have lost track of the number of out of state lenders or TC's I have had to set straight regarding IL requirements.

Reply by Brenda Stone on 3/3/06 1:15am
Msg #101569

Angelina -

**The Lender says... I don't care what the TC says... she's not on Title now and she won't be. Just ignore her and don't have her sign a thing.** Couple of points....1)It's my understanding that the DOT will not put the spouse on the title - does not change vestin. 2) Having her sign the nobs docs...the DOT, etc. is (like Pat said) for the good of the lien.

As far as entering the marriage with property and separate going over to community, that would definitely be a state to state thing and I think it would require more than just a refi in Texas to move it from sep to com prop.

Quitclaim Deeds are pretty much pointless in Texas and they are not used like they are in CA.

I saw one refi where the wife owned her sep. property home from before marriage. She was living in hubby's sep prop home. They had a pre-nup which said it was not his in case of divorce. For the purpose of a refi, the lender had hubby execute a Warranty Deed to wife. Basically he warranted he did not do anything to harm the title...he was a lawyer and that was his explanation for why. I guess that was another way to get the spouse to waive rights to a property in case the bwr defaults.

As you can see, the extra docs being signed are for the good of the lender...makes you wonder about the one you are dealing with. It does not appear to be harmful to the bwr not to have the nobs docs signed. DISLAIMER: Not a lawyer, however, would play one for cheap on tv.