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Home >> Lending >> Business Credit
Must I Co-sign Loans for My Husband?
Every time my husband wants to refinance the mortgage, the bank wants my signature too. Why is that?
I'm Austrian and not familiar with the laws here in America. My husband and I live in Michigan. Since my marriage isn't going that well, I don't feel very comfortable of signing anything. My husband always lies about his financial situation and I don't know who I can trust. He and the bank say that it is the law, that I have to sign the mortgage too. I don't want to be responsible for his debt. He had it long before our marriage; I just didn't know anything about it until recently.
My husband also wants to renew his business loan with Huntington Bank and he again tells me, that the bank needs my signature too. I'm not involved in his business, neither do I own any of his properties. Why do they need my signature? I have no credit history here in the US, I do not work, have no income, nothing. That does not make any sense to me.
What exactly means renewal of a loan anyway? Does this mean my husband paid if off and just wants to start another loan, or does it mean he didn't pay it off in time, and wants to extend it? What happens if I don't sign and the bank won't renew it?
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 The bottom line is that under Regulation B, which implements the Equal Credit Opportunity Act, you could be required by a lender to sign collateral documents, but not a loan contract. The contract is what obligates you to repayment. Even at that, if you said you simply wouldn't sign the collateral documents, the lender can't compel you to do so. They can then make the loan, or not.
In some community property states you could be obligated on debts with your spouse, whether you signed on the contract or not. Community property laws vary from state to state which use community property. You'll need to inquire within your own state.
If a loan is due for renewal, the obligation has not yet been paid in full. The terms may change at renewal meaning the rate, length of the loan and payment may go up or down. If it isn't renewed for any reason and is actually matured, meaning it is due in full, then the balance and all interest is owed. If it isn't paid, the lender may seek to repossess and sell the collateral and take any other legal means of collection.
Published on BankingQuestions.com 2/26/09
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