A married borrower applies alone for a $275,000 loan on a home she will own in her sole name, and qualifies on her own income in a state that is not a community property state. May the lender require her spouse to sign the promissory note solely because she is married?
Correct Answer
C) Her spouse need not sign the note for this $275,000 sole-name loan
C. Marriage alone does not justify requiring the spouse to sign the note. The applicant qualifies individually; requiring an additional signature merely because the applicant is married conflicts with the individual-credit signature rule. A note creating personal liability is different from a document needed under state law to make the collateral available. Scope and exceptions: Necessary security-instrument signatures can be permitted under applicable state law. That exception does not automatically authorize a spouse’s signature on the note. Source: 1002.7(d)(1), (d)(4) — https://www.consumerfinance.gov/rules-policy/regulations/1002/7/
Why This Is the Correct Answer
C. Marriage alone does not justify requiring the spouse to sign the note. The applicant qualifies individually; requiring an additional signature merely because the applicant is married conflicts with the individual-credit signature rule. A note creating personal liability is different from a document needed under state law to make the collateral available. Scope and exceptions: Necessary security-instrument signatures can be permitted under applicable state law. That exception does not automatically authorize a spouse’s signature on the note.
Why the Other Options Are Wrong
Option A: Her spouse must sign the note, since marriage makes the debt joint
Marriage does not automatically make this individual application joint credit.
Option B: Her spouse must sign the application but not the note or the mortgage
A spouse’s application signature is not a universal prerequisite for individual credit.
Option D: Her spouse must co-sign wherever the loan is over $250,000 in value
This provision contains no $250,000 marriage-based signature exception.
Exam Tip
Separate personal liability from signatures needed to establish an enforceable security interest.
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