Colorado Springs Notary - Leon Austin

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Is the non-borrowing spouse obligated to pay the loan?

I had a closing this evening that involved a non-borrowing spouse.  One of the questions that I'm typically asked is:

'Why do I have to sign anything?  I'm not on the loan.'

The concern is genuine, and I give a brief explanation.  Along with their concern is the question:

'Will I be obligated to pay this loan?'

Good question.  The Notary Signing Agent is not supposed to give legal advice.  But the answer to the question is outlined in the Deed of Trust.  So I simply point it out to the borrowers and it puts their mind at ease.  On their particular Deed of Trust it was outlined in paragraph 12:

Deed of Trust

This is why it is so important that the non-borrowing spouse does not sign the Note.

The location of the paragraph may be different, but the information regarding the non-borrowing spouse's obligation to pay should be contained somewhere within the document.  I put my finger on it, let the borrowers read it, and everything should go smoothly.

Good luck.

 

Comment balloon 5 commentsLeon Austin • October 15 2008 09:50PM

Comments

due to credit issues, I frequently see the spouse HAS to be on the note, but not the deed....in the end, if their credit is that bad, when it goes south, I doubt they will have the money, if if they did sign that note!

Posted by Pat Tasker, Your Milwaukee Metro Area Agent (WI) (Shorewest Realtors) over 11 years ago

Hmm. Interesting. I don't usually get asked that question. But in Florida, because of the "Homestead" laws, spouses always have to sign the closing documents, even if they aren't both on the note. Even if one spouse owned the home, before they got married, they both have to sign the closing documents. The reason is to prevent a spouse from selling the home out from under the other one.

Posted by Lisa Hill, Daytona Beach Real Estate (Florida Property Experts) over 11 years ago

OMG!  Leon, and others, this isnt against you by any means, you did a nice job of pointing this out, but reread this sentence "Any borrower who co-signs the Security Instrument, but does not execute the Note.........

Im sure they have their reasons, which would be interesting to hear, but the sentence contradicts itself, IMO.

How could they be a borrower if they arent borrowing the money, lol.  No wonder people are confused.

I was told from a closing agent in Wisconsin this statement on why a non-borrowing spouse signs the Security Instrument and other legals:  "Purpose is to have NBS permit their interest in the property to be subject to the lien of the mortgage"  For Wisconsin, we are a marital property state and the spouse is required to sign the mortgage, unless its an investment property.  And this can depend on Title Company and/or Lender.  Sometimes they require the spouse to sign on investment document legals even if they arent required to.

Posted by Lisa Kimmel, Mobile Loan Closer - Notary (Central Wisconsin Notary) over 11 years ago

They aren't obligated to pay the Note, but, if foreclosed due to non-payment, that NBS still loses the home. 

Posted by Ardel Richter (Arkansas Notary on Wheels) over 11 years ago

"if foreclosed due to non-payment, that NBS still loses the home."

If foreclosed, it's hard to imagine that the lender would let him or her keep the home.

 

Posted by Leon Austin, Colorado Springs Mobile Notary (Mobile Notary Services) over 11 years ago

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