Posted by CJ on 8/31/07 11:23am
Msg #208861

Non-borrowing Spouse

I have been a SA for about 7 years. I am always told, "Only have the people sign where their name is typed."

I know that if someone is on the Deed, but not the loan, they usually sign certain docs, like the DOT, TIL, RTC, and Itemization.

Lately I have been getting talked to because "Even though is says, "Sole and separate property, you SHOULD know that the spouse needs to sign the DOT, TIL, RTC, etc."

This bugs me becuase I am not an attorney, who knows who should sign what, espcially in all 50 states. If I don't have them sign, I get in trouble for not being clarivoyant. If I DO have them sign, I am risking getting in BIG trouble, like in giving legal advice ("sign here, even though your name is not typed".

I don't need to be flamed becuase I understand this is a problem. I would like to know if you are running into this too, and how you handle this. Thanks.

Reply by Glenn Strickler on 8/31/07 11:33am
Msg #208863

Yeah, it seems to vary not only by state, but by lender and TC. When there is a non borrowing spouse, I always get the instructions on what they are to sign in writing. I sometimes get some grief at the beginning with statements like "Don't you know?" . But actually most of these type of loans that I do usually some with instructions without my having to ask. But I always get it in writing ....

Reply by Katrina Arnaud on 8/31/07 11:38am
Msg #208865

I have the same problem with the 1003.

I, for one, can read, and follow the directions printed on the form. Countrywide is almost the only lender that wants the form signed as directed in the instructions printed on the top of the form.

Reply by Roger_OH on 8/31/07 1:16pm
Msg #208895

The key word is "spouse". Most states have dower/homestead laws where a spouse has to sign the security docs, even if they are not on the title. The laws are intended to prevent a spouse from selling a piece of real estate out from under their husband/wife without their knowledge and circumventing community property requirements.

Not flaming you, but knowing this IS part of being a signing agent. Anytime you see only one borrower's signature line on the docs (and he/she is married), call the TC/Lender to clarify and see if they need to redraw, or if you can just add the spouses name to the specific signature lines. Docs frequently arrive without the non-borrowing spouse on them, and the company will be grateful you saved them a re-sign.

Reply by CJ on 8/31/07 1:28pm
Msg #208901

Hi Roger,

I do see your point. The problem is, California is not one of the states that has the homestead laws, so USUALLY, I am forbidden to have them sign if if their name is not typed. But last night, I signed in Calfiornia, but the property was in Texas. And it was late at night, and there was no one to call, and the borrowers are flying out of town first thing in the morning for the weekend, etc. I had to guess. Argh!

I do apprecaite your input. You are polite and informative. Thanks.

Reply by Sylvia_FL on 8/31/07 1:45pm
Msg #208907

I know in Florida the non-borrowing spouse signs. However if their name is not on the docs to sign I call the title company to ask them what they want me to do. If I cannot reach them, then there is nothing I can do. I have been informed by the UPL counsel to the Florida Bar (after I contacted him to get the answer), that the docs are legal docs and for me to decide and have the NBS sign would be UPL.

Reply by Vince/KS on 8/31/07 2:54pm
Msg #208935

Had an attorney (male) non-borrowing spouse and Medical Dr wife for a refinance loan. She was the bo. He did not want to sign anything. I asked him to discuss it with the title company (they told me in advance which forms they were requiring him to sign). Instead he called the lender. The lender said "only the deed is necessary" on the speaker phone. I started to say something about what the title company said and he hung up the line. I called the title on the cell phone and advised what happened. They advised him that if he did not wish to sign the other documents they would request for me to leave. He signed the ones they wanted in a very chilly atmosphere.

Reply by Les_CO on 8/31/07 8:39pm
Msg #208983

Re: Non-borrowing Spouse/CJ

First may I say that I agree with Sylvia; when in doubt call the Lender, or Title Co.

Now… I'm just a s*** kicker from CO, and sure don't know the law everywhere, but I can tell you Texas has some strange ones! (Your House, your Horse, your Gun.. NO LIMIT!)

Here in Colorado the homestead laws have nothing to do with "A Spouse trying to sell property to circumvent the community property laws." (Sorry Roger!) CO is not a community property State.. We don’t have any community property laws.

Our homestead laws were/are designed to protect a portion of the primary residence, in the case of personal bankruptcy / foreclosure.( Ma we can save a bit of the ol’ homestead from those villains at the bank!) Example: Suppose the guy owns the house, he’s been married to the ‘ol lady since before they bought it, (She doesn’t work, just as “the homemaker.”) and lived in it. The guy is now going to refi for whatever reason. All the docs are/and have been, in his name only (perfectly okay in CO) He signs the docs, she doesn’t. The deal gets done. The guy doesn’t pay. The bank forecloses, he takes bankruptcy. The first $45K of the foreclosure sale proceeds go to the ol’ lady (spouse) Why? Because it’s her primary residence, and the homestead law protects a portion of that. They (the villains) can still go after any assets he has, if there is a shortfall. Why do lenders want the NBS to sign the DOT? It’s because IN IT there is a clause that states the signatories waive all their homestead rights.

BTW…I ain’t a lawyer, and this is just chat room talk!

Reply by MikeC/NY on 8/31/07 4:50pm
Msg #208952

I think we should know our own state's requirements, since probably 99% of the signings are for property located in the state your feet are in... It's kind of hard to apply a rule of thumb when some states have different... um, thumbs.

For instance, NY is neither a homestead nor a community property state, so the NBS here only signs if they are on title. And sometimes it gets weird - I did a signing last week where the NBS was the ONLY name on title - there was a quit claim deed in the package to add the borrower to the deed, and some additional state required paperwork you normally only see for a purchase; it's up to the TC to make sure the documents get recorded in the proper order.

The other 1% or so of the signings that are for out-of-state properties can be a problem at times. We can't be expected to know the rules for every state ("we" doesn't include PAW, of course...), so we've got to rely on the TC to tell us what's required - they're the ones who are supposed to know. I have the list of which states require witnesses, but have no idea which states outside of FL are homestead states - and the only reason I know about FL is because of all the snowbirds up here in NY.

Reply by MichiganAl on 8/31/07 8:32pm
Msg #208981

I agree Roger, it's important to KNOW who signs what

KNOWING allows us to make the phone call that can save a do-over. We just can't make the decision ourselves. Also, I think it's important to check the signing instructions. The non-borrower's name may not be listed on the RTC, TIL, and mortgage, but the signing instructions many times will clearly indicate that non-borrower must sign certain docs.

Reply by JanetK_CA on 9/1/07 9:55pm
Msg #209113

I mostly agree

"Spousal" and "community property" laws are going to vary from state to state and there are lots of variables here in California that can come into play, so I think CJ's point is valid. I feel some of the problem arises when someone tries a one-size-fits-all approach to dealing with this issue. (Of course, the lender has the right to request whatever signatures they want.)

I'm no attorney nor am I an expert in how title can be held, but I CAN say that I have seen very many situations where title is listed in one spouse's name as "Sole and Separate" and there is no requirement for the spouse to sign anything. I have also seen a number of situations where the package included an Interspousal Transfer Deed which allowed the property to be vested as "Sole and Separate" for the other spouse, precluding the need for that person to sign any of the rest of the docs. And there is no way WE can know what docs have or have not been previously recorded regarding how a couple is holding title unless signing and or escrow instructions give a clue. (There appear to be a variety of ways to deal with this issue in CA, so this is just an example.)

But I completely agree about the importance of knowing enough to be able to decide when that phone call is called for.