A married couple in Texas is using an FHA loan to buy their first home. The husband is the sole borrower. During closing, the title company requires the wife to sign a document. Which document must the non-borrowing spouse sign under Texas law?
Correct Answer
A) The deed of trust because Texas homestead law requires both spouses to consent to liens on the homestead
Under Texas Constitution Article XVI, Section 50, both spouses must sign the deed of trust on a homestead property, even if only one spouse is the borrower. The non-borrowing spouse consents to the lien but is not liable for the debt.
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Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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- → A Texas property owner defaults on both a first mortgage and a second-lien home equity loan. The first mortgage lender forecloses and sells the property at the trustee's sale. Under Texas law, what happens to the second-lien home equity loan?
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- → Under Texas Constitution Article XVI, Section 50(a)(6), a home equity loan on a Texas homestead must comply with numerous constitutional requirements. All of the following are required provisions of a Texas home equity loan EXCEPT:
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