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#1370778 - 04/07/10 07:14 PM Rescission violation or a bad filed Mortgage?
nutoregs Offline
Joined: May 2006
Posts: 55
Borrower gave us a second mortgage on his primary residence for medical expenses consumer purpose loan.
Issue: Application in the name of him only (Husb & wife were divorced over two years ago.)
Our filed Mortgage is in his name but the loan officer had his ex wife sign the mortgage document as though she has an interest in the property. (We are not a community property state, but if the borrower is married we have the wife sign the mortgage document only to release her dower interest when her income is not used as a basis for our credit decision.) They are divorced-- but she still lives there.
(I have a quit claim deed filed two years previously where she granted to him the property that is pledged for collateral)

She was not given a ROR.

Do I not understand what a quit claim deed does? or do I have a violation because she did not get a ROR and can now rescind this loan for three years? or do I need to release the mortgage remove her name and re-record it? I tried to contact our legal council but he is on vacation for two weeks. I have a commercial lender that is always trying to do consumer loans and violates the consumer regulations like no one else. I have written this LO up so many times---I have to get a handle on this before I present this to the board (In two days) It could mean the LO's job. Any help you can give me will be extremely appreciated.

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Lending Compliance
#1370804 - 04/07/10 07:25 PM Re: Rescission violation or a bad filed Mortgage? nutoregs
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,464
Bloomington, IN
If she quit claimed the deed to the husband she has no ownership in the property therefore she was not entitled to the ROR. And if they are no longer married then she should also have no dower rights in the property, but that's a matter to be researched in your state law.

She had no legal capacity to sign the mortgage so basically her signature is just taking up space on the mortgage. How it could affect your filing is again a matter of state law. I honestly don't think it will be that big of an issue. If you can't reach your attorney contact your recorder and see if they can help you.

Or if it would put you more at ease file an amended mortgage. That would be what I would advise our people to do if such an situation came up here.
The opinions expressed are mine and they are not to be taken as legal advice.

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