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Mortgage discrimination?

Posted on: 30th Oct, 2006 06:18 pm
my ex and i separated in may2005. we do not have a written separation agreement. divorce proceedings are continuing to drag on in pennsylvania (we are both residents).

we sold our marital residence in 12/05 and used proceeds to pay down joint debt. i purchased a townhome in 12/05. i paid a large downpayment using monies i earned/was gifted/borrowed post-separation and obtained a mortgage (i am solely liable for repayment) for the balance of the purchase price. i am the sole owner of the townhome.

recently, i applied for a home equity line of credit with the lender holding my mortgage. because i have more than 35% equity in my home, i was approved. when i received loan docs. for execution, i noticed that lender erroneously identified me as unmarried (i disclosed marital status during first phone call). i called loan processor and asked her to correct the error.

now, the lender will not close on the loan unless my ex-husband either (1) signs a quit claim deed (relinquishing a right that doesn\'t exist) or (2) signs all loan docs. as a non-vested spouse. my ex is not likely to do either. interestingly, the lender stated that if i was married or separated but had not yet filed for divorce, the loan would close no problem.

does the lender\'s conduct constitute mortgage discrimination? can anyone offer me some advice on how to resolve this situation?

any assistance would be greatly appreciated!

cml
Hi Guest,

If the lender has erroneously identified you, it is his mistake and not yours. It is not unfair on his part to ask you for a quit claim deed or let your husband sign all loan documents as no-vested spouse. It may lead to complications in the deal and how's your husband going to sign the quit claim when he does not have any rights on your property. I think you should approach the lender with legal documents of your marriage and try to convince him about your marital status.

Thanks,

Sara.
Posted on: 30th Oct, 2006 07:12 pm
Under the Equal Credit Opportunity Act, lenders cannot discourage borrowers from getting mortgage because of race, national origin, sex, marital status, age etc. If you suspect any kind of discrimination, you can take the following steps:
  • You can persuade the lender to reconsider your loan application.

  • Check with your state Attorney General's office to find out if the lender has violated any state laws on mortgage lending.

  • File a complaint with the appropriate government agency. Here is the address:

    Department of Justice
    Civil Rights Division
    Washington, DC 20530
If you wish to know more about this law, refer to the article on ECOA

Thanks
Posted on: 30th Oct, 2006 09:19 pm
Sounds like your State is a community property state. For title insurance purposes (your lender is requiring title insurance) in community property states the spouse would need to sign off on any property until your divorce is final. Just the way the law reads. Has nothing to do with your lender or any discrimination.
Posted on: 02nd Nov, 2006 09:20 am
i agree with diane, if you live in a 'community' property state and your divorce is not final, your spouse needs to sign the deed.

marriage in a community property state allows; whats yours is mine and what mine is yours...so to speak. your spouse has rights to the property.

if for example, you decided not to mention your impending divorce and all went through fine and you closed. if your spouse found out you own the residence, he/she could claim rights to the property. any sale of the property, partial proceeds to him. if you refinance, cash out, partial proceeds to him.

its a sticky situation. probably the reason you were listed as 'unmarried' is the loan consultant wanted the loan to close. you insisted your marriage was still intact. lender has to abide by the law. your married, the spouse has to sign deed.
Posted on: 06th Nov, 2006 07:58 am
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