Posted by dawn/IL on 4/24/13 12:57pm
Msg #466944

Signature Affidavit AKA Statement & Waiver of Homestead

We you present a signature affidavit AKA statement to the borrower that is asking for a "sample signature of each name variation" and one of the variations of their name is not correct...such as, the middle initial is wrong, do you still have them give a sample signature of that variation? and if not what do you put there?

I explain to my borrowers that it could be a typo and they can check into their credit report and have it corrected but I still need to have them sign the variation the way it is shown. Or do I have them write NA on the signature variation line. I have seen this done both ways.

Also Can anyone explain the "Waiver of Homestead" the wife is not on the loan or the title but is required to sign the "Waiver of Homestead". I'm confused on how to summarize this doc. any suggestions would be appreciated.

Thank you in advance for your help. :-)

Reply by Pam/NM on 4/24/13 1:10pm
Msg #466948

I always ask hiring party what they want, but most often they will have borrower write "Never Known As" and initial.

Reply by Ilene C. Seidel on 4/24/13 1:18pm
Msg #466951

I also have the borrower print "never known as" and initial. Had one the other day. The borrowers son was on his credit report.

Reply by Linda Juenger on 4/24/13 1:25pm
Msg #466953

I do the same "never known as".

The Waiver of Homestead only gets signed if it is an investment property or the property is in a trust. This is my experience with this doc.

Reply by JPH13/MO on 4/24/13 2:01pm
Msg #466956

Waiver of Homestead - why it's used

The people you are signing must be in a spousal state (?) In order to give up their spousal rights to a property, a spouse must sign this waiver. If the waiver is not signed or has not previously been signed, OR a Quit Claim Deed giving up their rights has not been signed, then the spouse MUST be included on title even when that spouse is not on the Note (loan). Usually a waiver is used if they are still married and a QCD if they are divorced.

I have come across 2 types of situations where this is used:

1) Sample of least common situation: The spouse mostly lives in Mexico, doesn't care about spousal rights, and wants spouse to be able to sign refi docs, etc. without his/her having to also sign.

2) Most common: 2 people get married, one or both had investment properties prior to marriage, or one kept the home they owned but now lives with the other one and that home became an investment property - they don't want their new spouse to have any rights to the property they had prior to marriage (to me this doesn't bode well for the marriage, but I do get it).

Reply by Bob_Chicago on 4/24/13 2:05pm
Msg #466957

Waiver of Homestead

I have only seen this form in Citi loans
Not sure of purpose.
Pretty sure that it has nothing to do with Real Estate Tax homestead exemption. . The purpose might be to waive state homestead rights in probpery, which if I am not mistaken, is accoimplished by them signing the mortgage.. Our's not to reason why, ours but to watch them sign and then stamp.
If the form is there it gets signed and dated by all parties whose name is on the form, and if no names prperinted then by borrowers and NBS if applicable.

Reply by dawn/IL on 4/24/13 2:13pm
Msg #466962

Re: Waiver of Homestead

I have had this is at least 4 other loans I closed. I went right to the lender and TC and asked them to explain this form. No one can explain it. Best explanation to date is the comment previous to yours bob on this thread.

Reply by dawn/IL on 4/24/13 2:15pm
Msg #466964

Thank you all for sharing your knowledge! Truly appreciate it. :-)

Reply by ReneeK_MI on 4/24/13 4:49pm
Msg #466984

IL Waiver of Homestead

IL recognizes the Homestead Rights of spouses - here is the underwriting guideline from Stewart's Virtual Underwriter, referencing the specific statute:

"The signature of both spouses is required to a document which is acknowledged in order to release, waive or convey homestead estate rights. See 735 ILCS 5/12-904."

It is typical that a waiver of homestead rights is included in the verbiage, in the Fannie/Freddie Mtg/Dot's when needed for a particular state, but it is not unheard of for title agencies to cover their butt with both hands - and include a separate, specific Waiver.

It would be the non-obligated spouses who are waiving their Homestead Rights - which are automatically endowed title rights granted to non-obligated spouses who reside (i.e. may reside, ever resided, could possibly reside - depending on the title U/W's) in the subject property.

FWIW, MI also grants Homestead Rights to spouses.

Reply by Saul Leibowitz on 4/24/13 6:16pm
Msg #466998

Re: IL Waiver of Homestead AND ALSO

A waiver of homestead by the spouses or an unmarried borrower would:
1. possibly simplify the foreclosure process; and/or
2. waive a certain statutory exemption in the event of bankruptcy. Used to be $7,500.00 per person in Illinois and waiving this might improve a lender's position as creditor.

Find a currently licensed illinois lawyer expand on this and thanks to ReneeK for the Stewart data.

Reply by ReneeK_MI on 4/25/13 7:12am
Msg #467087

Excellent points, Saul - also illustrates

how very complex & intertwined lending, title, financial & real property laws are. Each seems to have their own rabbit hole that meet-up below ground.

Reply by dgd/CA on 4/26/13 8:19am
Msg #467229

(Sorry for the delay, I messed up and managed to post this in an incorrect thread!)

In our state, any recorded Homestead appears on the Preliminary Title Report (while this doesn't actually have to be recorded, most homeowners do so to provide indisputable evidence to the court, should the need arise ). The Lender, as a condition to close, always requires that it be waived (particularly in this market). Without doing so, means even less funds to them in a foreclosure or short sale proceeding.

California Civil Code 704.720 - 704.730 (simple explanation):

<...provide the exemption along with certain dollar amounts depending on your situation. Make sure to read these code sections if you are interested in knowing what you qualify for. By way of example, an unmarried individual under age 65 with no dependents or disabilities is entitled to an exemption of $75,000...

To understand the usefulness of this exemption, lets take a look at a hypothetical example:
Example: Suppose you are an unmarried individual. Someone sued you and obtained a judgment against you for $225,000. You own a home worth $400,000, but you owe $300,000 on the home loan. This means your home equity is equal to $100,000. The judgment creditor files a judgment lien against your house and proceeds with trying to force the sale of your house in order to collect on his judgment. Assuming he succeeds, first the home loan will get paid. Then you will get your $75,000 exemption. The remaining $25,000 of equity will go to the judgment creditor who will still be owed $200,000. Because of the exemption, you get most of your equity even though your judgment creditor has not been paid in full. You are entitled to this exemption even if you do not file any paperwork. Therefore, there is no form to record for this exemption. HOWEVER, if a judgment creditor is trying to sell your house, you will need to appear in court and prove, among other things, that the house is in fact your homestead. Also, if your home is considered personal property (like a mobile home) you must file other paperwork. So do not think that your rights will be protected without any effort on your part. >

So, whilst the Homestead Act will not stop foreclosure, without the Waiver, it does indeed ensure the owner in a "first position" to secure funds from any forced sale.

Do an internet search: Homestead Act Illinois. Certainly we can't be explaining this to the signers but it will add to your understanding. BTW, interesting topic.