Spouse refinancing separate property - lender says debtor has to sign
Posted: Tue Aug 13, 2013 10:05 am
Clients have a prenup making clear that each spouse's property is separate,
including all real estate and wages earned during marriage.
Wife owns a house as separate property. A few years ago, she refinanced,
and the bank had the husband "sign" the deed of trust because they said it
was necessary despite being the wife's separate property. Well, "signing"
the deed put him on it as a "borrower" (despite him having horrible
credit), and despite him not owning any interest in the property.
Wife only discovered this issue now that she is seeking to refinance again,
and since the Debtor is going to be filing BK, I pulled the title and saw
his name on the deed of trust as a borrower and brought it to their
attention.
For the second time, the bank is saying that the debtor spouse has to sign
the deed of trust and has designated him as a "borrower"! Wife went back
to the bank and told them to take him off as a borrower, which they did.
However, they still insist he needs to sign the deed of trust on the last
page as a co-signer. The terms in the deed say that a "co-signer" is not
liable on the note if the note is not signed (which it's not signed by
debtor), and that the co-signer is merely conveying his interest in the
property (if any).
Is this normal, required, and necessary because CA is a community property
state? We just don't want the same mistake to happen again. We will
already have to explain to his chapter 7 trustee after he files why he was
mistakenly on the loan in the first place when everything is "separate".
Holly Roark
Certified Bankruptcy Specialist*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
*By State Bar of California Board of Legal Specialization
**For a quicker response, email me at holly@roarklawoffices.com.
I only use gmail for my listservs, and am likely to miss private emails
directed to my gmail account.**
Clients have a prenup making clear that each spouse's property is separate, including all real estate and wages earned during marriage.Wife owns a house as separate property.n" the deed of trust because they said it was necessary despite being the wife's separate property. Well, "signing" the deed put him on it as a "borrower" (despite him having horrible credit), and despite him not owning any interest in the property.
Wifeonly discovered this issue now that she is seeking to refinance again, and since theDebtor is going to be filing BK, I pulled the titleand saw his name on the deed of trust as a borrower and brought it to their attention.
For the second time,the bank is saying that the debtor spouse has tosign the deed of trust and has designated him as a "borrower"! Wife went back to the bank and told them to take him off as a borrower, which they did. However, they still insist he needs to sign the deed of trust on the last page as a co-signer. The terms in the deed say that a "co-signer" is not liable on the note if the note is not signed (which it's not signed by debtor), and that the co-signer is merely conveying his interest in the property (if any).
Is this normal, required, and necessary because CA is a community property state?eady have to explain to his chapter 7 trustee after he files why he was mistakenly on the loan in the first place when everything is "separate".
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