[princesscan]

I purchased a home when I was unmarried (widow). The Deed and the mortgage is in my name. I am getting a home equity loan and the bank wants my husband to sign a form which they call "Pro forma" statement. The Bank said that it is New Jersey law that if the property is a "Community Property" the spouse who does not own the property has to sign the "Pro Forma Statement." My husband does not want to sign any form because he thinks he will be responsible if I default in the payment or something happen. I would like to see what's in this form that I could show to my husband. May I ask if you have this form. Your reply is appreciated. Thank you.

[adonis]

Welcome Princess,

There's some kind of misconception going on here. New Jersey isn't a community property state. It is an equitable distribution state which means that after divorce, all assets including real estate owned by huband and wife will be divided as per the court in an equitable manner.

It doesn't mean that property has to be divided equally amongst the couple in realtion to the money they have contributed during their marriage.

[larry]

Hi Princess,

As far as I know, Pro forma statement is a kind statement that shows assets and liabilities, or income and expenses that may be documented in the future. But I think this form is mostly used in the business organizations. So why does your lender ask your husband to sign it. You can consult with other lenders also if it is really needed or not.

Thanks,
Larry

[michelle]

Princess,

Welcome to the forum.


Larry is correct in describing the pro-forma statement. I would recommend you try to obtain the actual form from the lender as they might be calling it a pro-forma when it is actually not. I have typed the text of another NJ disclosure below that may help you understand why your husband would need to sign the form. In NJ, the law basically requires that anyone who has interest in the property be aware that equity is being removed. His signature on the lender's form is probably just that - an acknowledgement that equity is being withdrawn. Without his signature, the lender would not have full interest in the property on which the lein is being placed.



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For Subject Properties or Current Residences Located in New Jersey:

New Jersey law provides civil untion partners shall have the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations, and duties under law, whether they dreive from statutes, administrative regulations, court rules, government policies, common law, or any other provisions or sources of law, as are granted to and impose upon spouses. Consequently, a non-borrowing civil union partner or spouse will have an ownership interest in the property of the borrowing civil union partner or spouse. The interest would prevent the lender from attaching the entire property securing the loan without consent of both civil union partners or both spouses. Therefore, the lender will require that both civil union partners or both spouses sign the deed of trust or other security instrument that secures the loan when such signature is required to protect the interest of the non-borrowing spouse or civil union partner.

BORROWER AFFIDAVIT

Can anyone, other than you, claim a homestead interest, community property interest, domestic partnership, civil union, or other interest, in the property that will secure repayment of the loan? Yes No

If yes, who may be able to claim such interest?

[Jessica]

Hi princesscan,

I agree with Michelle here.

Usually Pro forma statements are used for business purposes wherein one has to report the income and expenses or the future estimates. What I think is, perhaps this is some kind of loan document which is referred here as the Pro forma Statement.

As per the property laws in New Jersey, a co-owner should sign on any loan document to give his approval that equity is being drawn out of the property, that is, he is allowing the other owner to take out a loan on that property. Therefore, your husband needs to sign on the statement even if he isn't taking the loan. But this does not make him responsible for the loan. If he signs the promissory note in mortgage, then it will make him responsible and not the Pro forma Statement.

However, one thing's for sure – New Jersey isn't a community property state. Community property state is where you buy a property and after marriage if your spouse stays there and makes payments towards the mortgage, she will be having an interest in property proportional to the contributions towards payments.

Regards,

Jessica.