Husband & wife are on the deed to commercial real estate. The bank takes the real estate as collateral - both sign a mortgage. Husband owns the company, wife is a non-officer and has not signed the application or provided a financial statement. Husband applied for credit for the business.
We ask for a guarantee from husband, and the guarantee is further secured by the commercial mortgage. Wife has only signed the mortgage, and no other document.
If future debt is taken and secured by this guarantee, must the wife be notified in some fashion that the mortgage she signed is now securing (through the husband's guarantee) new debt?
We have an examiner asking this question - we asked back if he'd ever seen any kind of acknowledgment form executed by the wife in a case like this. He said no.
Anyone else ever experience this line of questioning? I see where he's going, but it seems like the mortgage document language anticipates this, and ongoing notification shouldn't be required. Our focus has always been 'don't let the non-applicant spouse sign the debt instrument'...
I appreciate your thoughts -
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- Bart Jonker, CRCM
Opinions stated are not legal advice, and are not necessarily the opinions of OAK Financial Corp.