First, note that the TRID rule does not require any signatures on the CD, but generally lenders get a signature and date to verify receipt. So the real question is whether the non-borrowing spouse needs to receive their own copy of the CD. If so, then it would be wise for them to sign and date the CD.

If the transaction is subject to the right of rescission then all persons with an ownership interest in the property should receive their own copy of the CD, because it contains the material TILA disclosures which are a trigger for ROR timing. See federal Regulation Z at 12 CFR 1026.23(a) and 1026.17(d).

If the transaction is not subject to the right of rescission then the CD may be given to any consumer who is primarily liable on the obligation. 1026.17(d)

Regarding Kansas, generally a non-borrowing spouse must sign the security instrument even if they are not in formal title to the property, based on Kansas probate and homestead laws. (Kansas Statutes 59-505 and 60-2301, respectively.) In that situation the spouse would generally be deemed to have an ownership interest in the property, and if the transaction is subject to the ROR then the spouse should receive his/her own copy of the CD, and sign and date it.

Just my opinion. Consult with your attorney to address your unique situation.

Non-borrowing spouse signing is usually an investor requirement because there is no Regulatory requirement for signatures on the CD. We're a FNMA shop and DU calls for non-borrowing spouse to sign Mortgage, CD and RoR.

Thank you so much for your assistance! Happy Friday.

Does the non-borrowing title owner need to be provided just the CD at closing or both the three day prior to closing CD and the at closing CD on rescindable transactions?

Both

Official Interpretation

17(d) Multiple Creditors; Multiple Consumers



2. Multiple consumers. When two consumers are joint obligors with primary liability on an obligation, the disclosures may be given to either one of them. If one consumer is merely a surety or guarantor, the disclosures must be given to the principal debtor. In rescindable transactions, however, separate disclosures must be given to each consumer who has the right to rescind under § 1026.23, although the disclosures required under § 1026.19(b) need only be provided to the consumer who expresses an interest in a variable-rate loan program. When two consumers are joint obligors with primary liability on an obligation, the early disclosures required by § 1026.19(a), (e), or (g), as applicable, may be provided to any one of them. In rescindable transactions, the disclosures required by § 1026.19(f) must be given separately to each consumer who has the right to rescind under § 1026.23. In transactions that are not rescindable, the disclosures required by § 1026.19(f) may be provided to any consumer with primary liability on the obligation. See §§ 1026.2(a)(11), 1026.17(b), 1026.19(a), 1026.19(f), and 1026.23(b).

I have a question on this thread. Refinance, Borrower and Non-Borrowing Spouse, primary residence refinance, I do understand that the non-borrowing spouse has the right to rescind, but does the NBS also need to receive a copy of the CD prior to closing? I am struggling with the fact that our Borrower gets disclosures electronically, and so we send the CD to the Borrower electronically. Would we also need to get the Non-Borrower spouse contact (email) and send a separate CD to the NBS to show that both received a copy? I am trying to understand the regulation in regards to this scenario when they live together.

In rescindable transactions, the disclosures required by § 1026.19(f) must be given separately to each consumer who has the right to rescind under § 1026.23.

The disclosures required by 1026.19(f) include the CD being delivered three business days prior to closing.

And you can't use the borrowing spouse's ESIGN demonstrable consent to "cover" sending the CD by email to the NBS. The fact that the borrower and the NBS live together doesn't mean you can assume the borrower shares the disclosure documents with the NBS. The NBS get his/her own copy.

If you were mailing a hard copy, you would either send two separate envelopes, one addressed to the borrower and the other to the NBS. If you disclose electronically, you send two separate electronic packets. If you use email, there should be two emails (preferably to separate email addresses, but if the borrower and NBS share the same email address, you send two emails to that email address, indicating one is for the borrower and the other for the NBS.

And both the borrower and the NBS must receive his/her copy of the disclosures three business days before consummation.

If a non-borrowing, non-owning spouse has homestead rights, do the have the right to rescind and need the CD 3 days prior to consummation? I seem to get different answers when I search different criteria.

Official Interpretation

17(d) Multiple Creditors; Multiple Consumers

2. Multiple consumers. In rescindable transactions, the disclosures required by § 1026.19(f) must be given separately to each consumer who has the right to rescind under § 1026.23. In transactions that are not rescindable, the disclosures required by § 1026.19(f) may be provided to any consumer with primary liability on the obligation.

Does the non-owning, non-borrowing spouse with only homestead rights meet the definition of "consumer" and therefore, have the right to rescind? That's probably a better way to ask maybe. Sorry if I wasn't clear. We have a software vendor that will include the non-owning, non-borrowing spouse on the mortgage and right of rescission; however, they do not spit out a CD for the non-borrowing spouse, which is a material disclosure for right of rescission.

If they have to sign the deed of trust - that mean they have an interest in the property under State law. They are required to receive the preliminary and final CD.

The way I am interpreting all of this is- in simpler terms, the nonborrowing spouse is not on page one but would be a signer and would receive the closing disclosure. ( I understand signatures are not required, but we opt to have signatures to document delivery and receipt)

Would the three day waiting from CD issuance to closing apply if we added a non-borrowing spouse after the CD was issued to the borrower?

All consumers with the right to rescind must receive a copy of the Closing Disclosure at least 3 business days prior to consummation. I'm not aware of any exception for adding a consumer with rescission rights after the Closing Disclosure has been provided to the other consumer with rescission rights. The new consumer must still receive their individual copy within the scope of the regulation.

One would think that someone would have realized that the non-borrowing spouse's signature on the mortgage would be required earlier than that. But if that isn't the case, and someone wakes up to that fact after the CD has been issued to the borrower, because the non-borrowing spouse is entitled to a copy of the CD three days before closing, I would say you would have to back up the closing date to provide that three day period.