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Reg B & Indemnity Deeds of Trust

Answered by: 
Lucy Griffin

Question: 
I am confused about Indemnity Deeds of Trust and the effect on Reg B signature exclusions. I have been taught that no matter who you are, if you are a co-owner of a property being granted as collateral by an IDOT you must guarantee also. I know that IDOT's were created for the purpose of securing guarantees not the reverse, but that is the reality. Is this just a back door to get the spouse to personally guarantee?
Answer: 

This would be subject to the state property law. Reg B prohibits requiring spousal signatures on the note in most circumstances. The sole exception would be a state property law that made the credit note invalid unless both spouses or co-owners sign it. However, lots of people have given bad advice on this one. We strongly recommend that you check your state law rather than take another person's word for it.

First published on BankersOnline.com 6/05/06

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First published on 06/05/2006

Filed under: 
Lending
Filed under lending as: 
Collateral

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