Homestead Joiner of Spouse
Whenever a property is the homestead property, the spouse must “join” on the security mortgage, and most likely the TIL and Right to Cancel. It does not matter if they are in title by themselves, homestead property is “marital property”, and therefore the spouse has a homestead interest in the property. This does not make the spouse jointly liable for the debt, but merely protects the lender’s lien in regards to marital homestead property. If only one spouse financed a homestead property, the other could claim lack of knowledge of financing of their primary home, hence the mortgage would not be a valid lien on the property. This is also true for the sale of the homestead property, i.e., whether or not the spouse is on the title deed, they must sign the Warranty Deed at closing.
Power of Attorney
In order for a Power of Attorney (POA) to be valid to mortgage or convey real property, it must contain specific language. The majority of these documents are not acceptable for mortgaging or conveying real property. A Power of Attorney is null and void upon the death or incapacity of that person.
“I’m Divorced; well actually, I’m Separated”
Let’s face it, you’re either married, or you’re not. Again, if the property is the homestead property, the spouse must join at the closing. It doesn’t matter if your customer hasn’t seen or spoken to the estranged spouse in years. If they are married and financing their primary home, they cannot close without the spouse. If they are selling the homestead property, they cannot close without the spouse.
If a person has received the property by way of their divorce, the property settlement agreement must be presented to the title company. The property settlement agreement sets forth the requirements for the transfer of all property. The agreement usually recites a certain sum of money to be paid, then a deed to be signed by the other party. The title company can collect this money on the closing, and prepare the deed.
“I’m the Heir”
If a person tells you the “house was left to them”, they will need to provide the Last Will and Testament of the decedent, coupled with the Probate Case number. Leaving a will is just the beginning. The will may set forth the distribution of the estate, but the will has to be presented for probate. The probate court then follows proper procedure, such as publishing notice to creditors, determines homestead, determines the heirs, etc. No estate is the same. It is required that the probate case be in the county in which the property is located. If the decedent has several properties in several counties, probate would be initially opened in one county, with ancillary probates opened in the other counties
If a person is not mentally competent to sign documents, the court must appoint a guardian. The guardianship should include, (but not be limited to) power to “mortgage real property”, “convey real property”, and any other matters, which the guardian feels they would power to do. Remember, a Power of Attorney is no longer valid once a person is deemed “incompetent”.
Persons under age
A minor may hold title to real property; however, they CANNOT convey or mortgage real property. A Guardian must be appointed to act on the minors’ behalf.
A title search generally will not find a bankruptcy. This is because a title search is a search of the public records, not the circuit civil case records. If you know your customer filed bankruptcy, let the title company know. Otherwise, the title search will most likely turn up numerous judgments, which were probably avoided in the bankruptcy.