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#389629 - 07/22/05 04:47 PM Spousal Consent
Anonymous
Unregistered

California's community property laws under Ca Family Code section 1100(c) require the written consent of the other spouse to encumber community personal property used as the family dwelling and dwelling related items. Would it be permissible under Reg B to require guarantors on a given loan to obtain the written consent of their non-guaranteeing spouse for their guarantee when the family dwelling is part of the total assests supporting the strength of the guarantee? (this is a business credit situation)

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#389630 - 07/22/05 08:48 PM Re: Spousal Consent
Princess Romeo Offline

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Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Will you be filing a Deed of Trust on the property? If so, you only need the signature of the non-guarantor spouse on the Deed of Trust itself. That is evidence of their consent.

If you are not filing a deed, you might check with legal counsel about a "limited" guaranty for the spouse wherein the guaranty is limited to the equity in the property.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#389631 - 07/22/05 09:43 PM Re: Spousal Consent
Anonymous
Unregistered

No deed of trust taken, just relying on the total NW including family dwelling for the strength of guaranty. It is desired to have available the family dwelling available to support the guaranty. The written consent required under the previously cited CA code is a concern, due to the fact that other spouse could claim they did not give written consent and therefore the dwelling is not available to the guarantor. The other spouse is not involved with the business at all, so I am also concerned with making them obligated in any capacity on the credit from a Reg B perspective.

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#389632 - 07/23/05 05:03 AM Re: Spousal Consent
Princess Romeo Offline

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Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
If you are not taking a Deed of Trust on the house, I'm not sure you will be able to rely on the dwelling being available. Afterall, the owner can easily get a home equity loan or line or junior liens and zap all of the equity out of the property.

A bank I used to work for would have the Deed of Trust secure the guaranty, and the spouse's signature on the Deed was sufficient according to their legal counsel.

You may want to ask your legal counsel about the "limited" guaranty, or of filing a Deed of Trust to secure the guaranty.

Reg B is fine about requiring the signature of the spouse on a document to make collateral available.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

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#389633 - 07/23/05 11:56 PM Re: Spousal Consent
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
I have used - when a guarantee was not in the picture for whatever reason - a guarantee that was limited to the spousal interest in the real estate. This was done in California as well as other states.

Regarding keeping the equity in the house available, has the bank considered a negative pledge (agreement not to pledge the assets) and a periodic lien search to confirm that the asset has not been pledged?
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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