We have a loan that is in the husband's name only but the Deed is in the name of the husband and wife's names. The attorney added the wife's name on the TIL even though the loan is under the husband's name only. We consider this as an Reg Z violation but the attorney disagree. Only thing I can think of why the attorney added the wife's name on the TIL is becasue of the statement found in the Right to Rescind section:

d) Multiple creditors; multiple consumers. If a transaction involves more than one creditor, only one set of disclosures shall be given and the creditors shall agree among themselves which creditor must comply with the requirements that this part imposes on any or all of them. If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the obligation. If the transaction is rescindable under § 1026.23, however, the disclosures shall be made to each consumer who has the right to rescind.

Whether or not if the loan is rescindable, does the spouse need to be on the TIL even though the spouse is not on the Note?

Since the name of the borrower being on the TIL disclosure is not even a requirement of § 1026.18, I'm at a loss as to what is the issue?

It was discussed in another thread just a day or so ago that FNMA has three requirements for jointly owned homestead property that only one spouse is the borrower on.
The non-borrower must sign the mortgage, get the final TIL and be given the right to cancel.
These requirements are evidenced by the non-borrower's name and signature being on all three documents, whether it's a requirement of 1026.18 notwithstanding in FNMA's eyes.

One thing: not everyone follows FNMA.

The issue was that we wrote up an exception for the spouse being on the TIL when it shouldn't have been. The attorney is disagreeing with us and said that the spouse needed to be on the TIL. I need to prove that we were right and the attorney was wrong with backup supporting documentation.

From what I have found so far, under Regulation Z, it states 'If the transaction is rescindable under § 1026.23, however, the disclosures shall be made to each consumer who has the right to rescind.'

I also found this under Regulation Z: '(11) Consumer means a cardholder or natural person to whom consumer credit is offered or extended. However, for purposes of rescission under §§ 226.15 and 226.23, the term also includes a natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person's ownership interest in the dwelling is or will be subject to the security interest.'

From what I have been reading, if the loan is rescindable and only the husband is on the laon that is secured by a deed in the name of the husband and wife then the TIL will need to have the wife's name on there as well as the husband's name. If the loan is not rescindable then just the husband is fine on the TIL. Am I reading this incorrectly?


We don't do FNMA loans.

Even rescindable, the names are not required to be on the document. What you DO have to do, is give the non-borrowing owner a copy of the material disclosure (TIL) along with the Right to Rescind.

Since the names are not required to be on the disclosure, my next question is:

Is this a violation for Regulation B since we put the wife's name on the TIL disclosure and she signed the document even though she is not on the Note??

To go back to the original post, it is NOT a violation to have the non-borrowing spouse's name and signature on the final TIL.

Since FNMA is the largest end purchaser, I've found that a large majority of banks want to do loans that could be sold off if necessary. As I stated above, FNMA requires documentation of the non-borrowing, title holding person's receipt of the final TIL. This is best evidenced by their name and signature on the document.

No it is not a problem, even though you do not use fannie underwriting standards.

The issue was that we wrote up an exception for the spouse being on the TIL when it shouldn't have been.

It comes down to the fact that your finding was in error and the attorney is correct.

The issue was that we wrote up an exception for the spouse being on the TIL when it shouldn't have been.

Not an exception, okay either way.
The attorney is disagreeing with us and said that the spouse needed to be on the TIL. I need to prove that we were right and the attorney was wrong with backup supporting documentation.

Randy, you are agreeing with the attorney? Why does the spouse need to be on the TIL...Given a copy, yes...on it? Why?

I'm not necessarily agreeing with the attorney, but it doesn't matter, so there is no argument.

I agree with Randy. The original post said it was cited as a Reg Z violation. It is not. The bank should move on.

I am curious as to how the spouse was shown, hopefully not as a borrower. But it still has no legal effect.

Gotcha.

ETA: And I agree with Kathleen. Requiring a signature only, as a method of proving they got the material disclosure, I understand...but I can't imagine software handling this as anything but putting the names in the borrower/applicant section up top in order to get a print line on the bottom.

We found out that the attorney ADDED the spouse's name on our disclosure. We only had the husband's name on there.

I really don't see what the problem is, peony.
The attorney documented that the disclosure was properly given to the spouse by adding their name.
As has been pointed out, your bank viewed this as a violation which it is NOT. Rather, it falls in the realm of many banks' sop.
I would, however, have a problem with anyone altering the docs I provided them without clearing it with me first.
But if the attorney was providing you with an insured closing, you might have lost that insurance if you'd insisted that he do things your way.

I'll tell you how I handle non-borrowers...just to throw a possible alternative at you for next time.

I send a letter with the material disclosure letting them know why they are getting it and that they ARE getting it...that is my proof.