Legal Question in Real Estate Law in California

My husband is attempting to purchase a home and qualify for the mortgage in his name only due to my credit. I currently own a home where the title and mortgage is in my name only. The lender is telling him that the debts of the non-borrowing spouse are counted as his debt. I agree with other debt but if his name is not on the current loan and note, the lender can't collect from him if in default, can they? State of California


Asked on 3/05/13, 1:38 pm

1 Answer from Attorneys

The lender isn't interested really in what happens in case of default. Odds are the property will be sold in a non-judicial foreclosure, technically called a trustee's sale. Trustee's sales preclude the lender from going after the borrower for any balance due. What the lender in the present loan is concerned about is the debt service burden on your household. Since your household income is community property it is obligated to all the debts of the household. So that is why they count your debt and your income in the calculations to qualify.

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Answered on 3/05/13, 6:05 pm


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