On the Non-Borrowing Spouse
by Tim Gatewood
I think there’s some confusion over what “the law” requires versus what lenders want.
First, each state has state law that spells out who has an ownership interest in the real estate when a couple are married and one or both of them live in the home. This state law can range from community property (everything you own is also owned by your spouse) to homestead (if it’s your property and you live there, your spouse also owns it but you can own rental or investment property separately) to none (each spouse owns their own property). So, first you need to know your state’s law on property ownership.
Second, if both spouses are on title, both are owners, no matter what the state law says about real estate.
Third, once you know who the owners are, then the federal law kicks in. Under RESPA and TILA, and the combined TRID, owners must agree to mortgages on their residential property. They do that by signing the mortgage or deed of trust, the Closing Disclosure or Settlement Statement, and the Notice of Right to Cancel.
Fourth, even if the non-borrowing spouse is not an owner under state law or by virtue of being on title to the property, the lender may still make it a requirement that they sign those documents and others (such as any forms for the IRS or the VA or HUD) or they won’t let the loan close.
In any case, if the Non-Borrowing Spouse is not signing freely and willingly, you can’t notarize the documents — and trying to convince them to do so could be seen as violating your oath of office as a notary public. That’s because you’re supposed to be a disinterested witness, not an advocate for one side or the other in the transaction.
The first question for a notary is can you verify their identity. The second is do they choose to sign the documents freely and willingly. If the answer to either of those is no, the notary cannot proceed. So, you need to be very careful on how you speak with all of the signers in order to stay within the proper role of a notary public.
As with every article on this site, this is not intended to be legal advice or legal opinion. It is the author’s opinion as to the expectations for notaries based on many years of reading sources both widely and deeply. In other words, the author believes these are notary best practices or industry standards. If anything here conflicts with your state law or state’s official position, please go with your state’s rules.
Posted May 20, 2020