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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33759
Experience:  15 years real estate, Realtor. Landlord 26 years
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Did a refinance and concerned I give up too much protection

Customer Question

did a refinance and concerned I give up too much protection with waiver of homestead, i'm considering cancellation the refinance. I like to see if this waiver could be better defined to prevent cancellation.
Submitted: 11 months ago.
Category: Real Estate Law
Customer: replied 11 months ago.
need reply asap
Expert:  Barrister replied 11 months ago.

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

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Are you in a situation where you are married but the property is only on one person's name?

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Is this a normal commercial bank or some type of private lender?

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What exactly does your waiver state you are giving up?

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thanks

Barrister

Customer: replied 11 months ago.
Athena is my wife, the loan is in her name, but the title is recorded in both our names. I signed: "I'm joining in the execution of this security instrument solely for the purpose of consenting to the encumbrances of, and waiving any homestead property rights in, the described property"
Customer: replied 11 months ago.
today is last day before cancellation is no longer available to us
Expert:  Barrister replied 11 months ago.

Ok, this is a standard clause that all lenders are going to require because with the loan only in her name, they want to make sure that if it goes into default, that they don't have to deal with any issues with the non borrowing spouse claiming that they never agreed to pledge their interest in the house as collateral for the loan.

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So essentially what you are doing by signing the waiver is that you are agreeing to pledge whatever interest that you have in the house as collateral.

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I used to be a closing attorney for 4 different lenders and have done literally hundreds, if not thousands, of closings and the lender always required a non-borrowing spouse to sign off on the waiver. So it isn't anything out of the ordinary and only becomes relevant if there is a default on the loan and the bank has to foreclose.

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thanks

Barrister

Customer: replied 11 months ago.
thanks for the explanation... what exactly is Patrick giving up here and when, whatcircumstances is Patrick waiving any homestead property rights. This needs tobe spelled out better. Along with homestead is Patrick giving up homesteadexemptions as well? It's generally believed that Patrick is giving up too much with this statementand thus could lead to cancellation of the loan. This has not been spelled out clearlyin the documents.
The homestead exemption is a legal regime designed to protect the value of the homes of residents from property taxes, creditors, and circumstances arising from the death of the homeowner spouse.Homestead exemption laws typically have four primary features:
1.They prevent the forced sale of a home to meet the demands of creditors (however, in most cases homestead exemptions do not apply to forced sales to satisfy mortgages, mechanics liens, or sales to pay property taxes);
2.They provide the surviving spouse with shelter;
3.They provide an exemption from property taxes which can be applied to a home.
4.Allows a tax-exempt homeowner to vote on property tax increases to homeowners over the threshold via bond or millage requests.For purposes of these statutes, a homestead is the one primary residence of a person, and no other exemption can be claimed on any other property anywhere, even outside the boundaries of the jurisdiction where the exemption is claimed.In some states, homestead protection is automatic. In many states, however, homeowner will not receive the protections of the law until they file a claim for homestead exemption with the state. Furthermore, the protection can be lost if the homeowner abandons the protected property by taking up primary residence elsewhere.Immunity from forced sale[edit]Different jurisdictions provide different degrees of protection under homestead exemption laws. Some only protect property up to a certain value, while others are limited by acreage limitations. If homesteads exceeds these limits creditors may still force the sale while the homesteader may keep a certain amount of the proceeds of the sale.Property tax exemption[edit]-- MY GUESS THIS DOES NOT APPLYA homestead exemption is most often only on a fixed monetary amount, such as the first $50,000 of the assessed value. The remainder is taxed at the normal rate. In that case, a home valued at $150,000 would then only be taxed on $100,000; a home valued at $75,000 would be taxed only on $25,000.The exemption is generally intended to make the property tax a progressive tax. In some places, the exemption is paid for with a local or state (or equivalent unit) sales tax.IN SHORT, Looking for a document that clarifies this waiver, better defines the waiver, a document of understanding that they would accept as well. Spelling out what you just said considering this reply.
Expert:  Barrister replied 11 months ago.

Here is the way it goes... when parties are married and are both on the deed then they both own the property equally. But when a loan is taken out on the property in only one person's name, then that means that the other spouse is a non-borrowing spouse. Since the borrowing spouse can only put up what they own, which is 50%, then the lender won't agree to make a loan unless the non-borrowing spouse, who owns the other 50%, agrees to sign off to allow their 50% to be put up as collateral.

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That way the bank has the entire property secured as collateral for the loan. If they didn't do so, then they would only have a lien on 50% of the property and the non-borrowing spouse could claim that the house couldn't' be foreclosed on, even in a default, since it was their homestead.

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Since banks aren't very fond of risk, they will require everyone on the deed, and even a spouse if they aren't on the deed, to sign the waiver putting up whatever interest that they own as collateral.

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That doesn't make the non-borrowing spouse liable for the debt, as only the borrowing spouse is, but it puts the entire property up to secure the loan.

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But it has nothing to do with homestead exemptions or taxes or any other benefits of having a home... It is strictly to secure the lender's loan.

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thanks

Barrister

Customer: replied 11 months ago.
thank you, ***** ***** though nothing more needs to be done to clarify this waiver
Customer: replied 11 months ago.
is it possible to get a copy of this transcript
Expert:  Barrister replied 11 months ago.

Honestly, they are all standardized and don't expose the non-borrower to any more risk other than potentially losing the house to foreclosure if the borrowing spouse defaults on the loan.

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When I want to save something on the website, I highlight it and then copy and paste it into a Word document for future reference....

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thanks

Barrister

Customer: replied 11 months ago.
I got a rating email. Can't rate till issue resolved. The statements you made here support the Lender. However, the title company states that the waiver is not sufficient for funding. Together, the lender and title company are working out the details regarding the language. Closure of the loan appears in jeopardy. When this is settled, I will give you another update and rate at that time.
Expert:  Barrister replied 11 months ago.

I don't know that my comments support one side or the other...they simply are legally and factually accurate..

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But I don't send out any emails to customers. I am just an independent contractor and a site user just like customers. It is the company JustAnswer that sends things out to customers, but I apologize if they are pestering you..

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thanks

Barrister

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