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can a bank renege on a loan after the loan has closed using info they have had since the application?

I have a legal and binding separation agree with my husband which spells out that we can legally buy and own property "free of any claim or right of the other". When I bought my home after the agreement, my husband was not on the deed and his signature was not required. Now I am trying to refinance with the very same bank. The refinance had gone through closing and all the papers had been signed when 3 days later (2 days were weekend, 1 was a holiday), they inform me that they need his signature. Okay, so maybe their rules have changed. But they have had my marital status since I applied. In addition, the loan officer went over and over the deed which states in the first sentence that I am separated, the escrow officer asked for and was supplied with information about my spouse 4 months ago, and during the closing the agent was concerned and made a call. She was told that my husband's signature was not needed and we could proceed with the closing. How is it that they can come back now after the closing and say they need his signature or the loan won't be financed? by sarann_635_825 from Charlotte, North Carolina. Feb 20th 2013 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

It's the Golden Rule... he who has the Gold Rules!!... Unfortunately, this is the lending environment we are in.. And yes.. The bank can make that request, and they could hinge the deal on whether he signs or not.. It's their money and their rules... and their hand cannot be forced.. This might be a dragged out answer, but all of today's loans are sold on the open market.. if a loan goes into default, then the microscope is on the lender who originated the loan, and the investor who brought the loan to market. They will be looking to defer liability to someone else.. Because of that, your lender is requiring a signature from your separated husband. It's probably a "Disclaimer Deed", and this is common if you're in a community property state, even though NC is not.. Since the guidelines are not 100% clear regarding separated spouses in "non community property states" your lender is just trying to cover all bases in the unlikely event your loan goes into default, they can claim that they went above and beyond the guidelines just to cover their butts... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Feb 20th 2013
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Dave Metsker (DaveMetsker)
#36 ranked lender in Oregon - 2,318 contributions

My over 25 years' experience in the the mortgage industry tells me that the closing agent did not do the proper advance coordination with the title company. This can happen at the last minute, when the title officer reviews the file in depth, prior to giving approval to record the loan documents. The breakdown is not the fault of the bank lender, who is anxious to make the loan, which is how the bank makes a profit, in order to stay in business. The state laws with respect to community property or spousal rights, as they are sometimes called, supersede your separation documents which ALLOW, but do not GUARANTEE, the right to buy and own property. One option, however impractical, is to move to a state that does not have community property rights statutes.

Feb 20th 2013
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,236 contributions

It is very common for additional documents to be needed and required even after a loan funds. So much so that one of the documents that is usually included in the loan package is an agreement to provide post funding documentation. Further, in this particular case, even though you have a "separation agreement", you are still married. In many states this will require documentation or signatures from the non-borrowing spouse. It is unfortunate that all of the parties couldn't get you this information up-front, but if you are going to get the new loan, you will have to comply. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Feb 20th 2013
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

Yes, they can and since the loan has not funded they will need that signature. Will you have a problem getting his signature? Sounds like you are still legally married and as such do not have a divorce decree and if he is on that title then they do need his signature.

Feb 20th 2013
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Patrick Colligan (pcolligan3)
#43 ranked lender in South Carolina - 4 contributions

You may be in a spousal right state and they need his signature signing off he has no claim to the property.State laws could overide your seperation agreement as to why this is needed.

Feb 20th 2013
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 401 contributions

It doesn't sound like the bank is wanting to renege. They are just wanting to ensure that the mortgage is saleable to the secondary market, most likely Fannie Mae, Freddie Mac, or HUD/FHA depending on the type of loan. Yes, the lender and title company should have caught this well before now. Even though your separation agreement states you can buy/own property... you are still legally married and there are dower rights of the spouse regardless of what's been agreed to. For clear title to any property either of you buy the other would need to sign off on the deed waiving these rights.

Feb 20th 2013
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

unfortunately they can

Feb 20th 2013
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Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

Sounds like your current lenders compliance or closing dept does not agree with underwriting who cleared the loan to close in the first place. Who is your current bank, what are they asking your X to be to sign? He cant be signing the loan documents as he didnt sign the original loan application. I would fight this and or look for another lender if it doesnt go threw. WWW.HOMEMORTGAGEXPERT.com 855 411 LEND

Feb 20th 2013
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David Kosmecki (David_Kosmecki)
#36 ranked lender in Minnesota - 258 contributions

Typically the recission period is only for the borrower. The lender can not change the mind. If they asked you for documents they said they would accept during recission, that may be a gray area. If they did not have conditions they presented prior to close. They should not be able to ask for additional documents.

Feb 20th 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

I am not an attorney but I can tell you that your separation agreement is NOT a divorce decree. If you not divorced, he MUST sign the Mortgage, TIL and Rescision documents. These are the documents that, in laymans terms, provide HIS consent to your encumberance of the property.Since you are not divorced, the banks position is that he MAY be able to come back and claim some sort of ownership interst in the home and potentially invalidate the loan.If they have told you they need his siganture or they wont fund the laon, they wont fund the loan.

Feb 20th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,323 contributions

Simply said, someone screwed up on their end. Your refinance loan "back out" period is three days, and is only for you. The lender can not back out. You did sign documents that indicated you would assist them in obtaining anything they need (like new signatures), but they can not back out. Contact an attorney... and for the future... It is wise not to use a bank.

Feb 20th 2013
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Ron Wohlfarth (RonWohlfarth)
#34 ranked lender in New Jersey - 65 contributions

Good Morning Sara Ann...I would contact the local Better Business Bureau for assistance with a refund of all fees that you paid to this lender...If they are not able to assist you, I would seek an Attorney to represent you...Please obtain an Attorney that has been recommended to you by a trusted friend or family member...Ron

Feb 21st 2013
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