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#7315 - 11/30/01 09:09 PM Spousal signatures - guarantees
Bartman Offline
Diamond Poster
Bartman
Joined: Oct 2000
Posts: 1,191
Springfield
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.

_________________________
Opinions are Bartman's, not those of my employer. "A noble spirit embiggens the smallest man."

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General Discussion
#7316 - 12/03/01 01:59 AM Re: Spousal signatures - guarantees
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
It's a good question. It is controlled by state law. If state law requires the notice, then you'd have to give it. Otherwise the language in the mortgage itself regarding what is secured should be sufficient.

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