Posted by Karen Riley on 3/19/11 6:37pm
Msg #376714

Non borrowing spouse

Don't tell me to hit the search button, to much stuff on this. What are the rights of a nonborrowing spouse on the mortgage. Do they also then own the property, without being on the note? My husband is one of those. But I have a lot of people who owned their house before they got married, and are very concerned about putting their spouse on the mortgage of their house. Just need some clarification, don't post often I am leary of the responses.

Reply by Linda_H/FL on 3/19/11 6:44pm
Msg #376715

In FL, if this is borrower's primary residence...IOW

their homestead property - the husband may not be on title but he has certain rights in the property - when he signs the mortgage he's basically consenting to the lien on his homestead and he has the right to cancel that lien in the 3 day rescission period. He's not "on title" unless the property is deeded from the current owner to both of them.

You really should search here - yes there IS a lot of stuff on it - and it's probably explained far better in those posts. The above is my "nutshell" explanation.

Reply by Karen Riley on 3/19/11 6:51pm
Msg #376719

Thanks Linda
The non borrowing spouse this afternoon was afraid she would be obligated to pay for it. Your clarification helped even in my own circumstance. Don't want hubby to get to cocky. LOL

Reply by Linda_H/FL on 3/19/11 6:55pm
Msg #376721

LOL...don't quote me on it but I think she IS obligated

but maybe Paul will chime in and explain it better. This is not something I've been concerned with as those questions get referred to their attorney or their LO - and in my personal circumstance we're both on title.

Reply by Karen Riley on 3/19/11 6:59pm
Msg #376724

This guy had it in his pre-nup that his Mommy would get the property. Are you kidding me?

Reply by Linda_H/FL on 3/19/11 6:59pm
Msg #376725

Ouch!! n/m

Reply by HisHughness on 3/19/11 10:34pm
Msg #376744

And you find it objectionable that a spouse would prefer a property owned prior to marriage go to his mother instead of his spouse? Just a guess, but I'd suspect the mother has been involved with him much longer than the spouse, and may even be in greater need.

Would you find it equally questionable if he wanted the house to go to an adult child of a previous marriage?

Reply by Susan Fischer on 3/19/11 10:53pm
Msg #376748

So true, HisHughness. One would think that would all

be settled ~prior~ to the agreement to marry.

We could reverse that scenario, and ask why a subsequent husband would "expect" to receive a wife's property, say, a house that she wanted to go to her child(ren).

You raise a good point for working out the legal-beagle deals with professionals prior to the 'I DOs' instead of after the 'But you promised-es.'

Reply by JanetK_CA on 3/20/11 12:36am
Msg #376758

Re: So true, HisHughness. One would think that would all

It could also be that the mother made it possible for him to buy that house in the first place, for all we know. There are often multiple possibilities that we have no way of knowing about.

Reply by Susan Fischer on 3/20/11 2:39am
Msg #376760

Exactly, Janet. n/m

Reply by JanetK_CA on 3/20/11 2:58am
Msg #376761

Actually, you ask a very interesting question. This is one of those things, of course, that will vary greatly, depending on state law.

Not too long ago, I had a loan signing stopped when a non-borrowing spouse who was on title wanted to know what would happen with the loan if her husband died. She was adamant about wanting to be on the Note because she was no longer working and wouldn't qualify on her own if something happened to him. They called an attorney friend (this was on a weekend) and were told that it was possible that the lender could call in the loan OR she might have to go through an underwriting process to be approved by the lender to keep the loan (assuming she was able to continue making the payments to keep the house).

I have no idea if what they were told was correct or not (even for my state of California, which is a community property state), but it definitely was not what I expected. It made me look on that issue in a whole different way, although it doesn't change how I handle those situations.

Finally, as you probably know, while this is an interesting topic, this is an area that we need to be very careful about keeping our nose out of and leave it to the attorneys. That lady was at least smart enough to ask the questions and stick to her guns. Her husband wanted to proceed, but she wasn't having any of it. For all I know, he could have some kind of health condition - and she may have saved herself lots of aggravation - and perhaps much, much more. BUT it's still not something I will be discussing with any non-borrowing spouse. I just thought it was an interesting tidbit.

Reply by LKT/CA on 3/20/11 5:21pm
Msg #376791

Private Mortgage Insurance

<<<Not too long ago, I had a loan signing stopped when a non-borrowing spouse who was on title wanted to know what would happen with the loan if her husband died. She was adamant about wanting to be on the Note because she was no longer working and wouldn't qualify on her own if something happened to him. They called an attorney friend (this was on a weekend) and were told that it was possible that the lender could call in the loan OR she might have to go through an underwriting process to be approved by the lender to keep the loan (assuming she was able to continue making the payments to keep the house).>>>

That's interesting - and thought provoking. I too am a non-borrowing spouse - on title but not on the loan. Besides life insurance, the route I would take would be to have Private Mortgage Insurance so that if my husband passed away, the insurance pays off the house. Considering the income my husband makes, I would not be able to match it, therefore, having the house paid off is the better route to go. If PMI is $4,000 per year, broken down to monthly payments of approx. $334 - that's a fraction of my monthly mortgage payment. That insurance could be POC (paid outside of closing) or wrapped into the loan.

While PMI is usually added when there's less than 20% equity left, it's not a bad idea for a non-borrowing spouse who couldn't replace the other spouse's income, or qualify for the loan on their own. NOT LEGAL ADVICE.....but a suggestion to consider.

Reply by LKT/CA on 3/20/11 5:35pm
Msg #376793

Sorry...wrong insurance

It's Mortgage Life Insurance that specifically pays off the house in the borrowing spouse passes away.

Reply by jnew on 3/20/11 9:54pm
Msg #376812

The spouse signing does not create any new rights for the spouse other than what is already established by deed or marriage. The spouse signs the mortgage to give the lender a full lien on the property. If the spouse did not sign, the lender would not be able to foreclose the mortgage if it went unpaid. I would not explain this at a signing because it is a matter of law and I am not an attorney. What bothers me at signings is that many times the non-entitled spouse was not made aware of the signing requirement by the lender before closing. The signing agent is then expected to explain the necessity of the signature. If the spouse is in title but not on the mortgage, the spouse should consult with legal counsel especially on the probate ramifications.

Reply by jnew on 3/20/11 9:57pm
Msg #376813

"If the spouse is in title but not on the mortgage, the spouse should consult with legal counsel especially on the probate ramifications"

I should have said "obliged under the mortgage" rather than "on the mortgage".

Reply by JanetK_CA on 3/22/11 2:41am
Msg #377017

Mortgage vs. Deed of Trust

You bring up another major difference from state to state, as some will have mortgages and others will have Deeds of Trust instead, and I have no idea what the implications are with those differences.