Guidelines for Borrowers, Co-Borrowers, and Non-Borrowing Parties in Mortgage Transactions
Any person signing an application for a Mortgage Loan is a Borrower. All Borrower’s must sign the Mortgage Note. A Borrower must be an individual. Title must be vested in the Borrower’s name or in the name of a trust (Properties Titled in a Trust) at time of closing for all transactions. At least one borrower must be on title at application. Income from a co-borrower added after application can be used if there is proof they have resided in the property for 6 months (proof includes but is not limited to utility bills, W2’s, government issued photo I.D., a bank statement, other financial statement and/or vehicle registration). Non-income contributing borrowers are not required to be vested on title at time of application and can be added to title at closing. For loans secured by subject properties in Texas, non-married vested persons who occupy the property must be added as a co-borrower.
LLC Title Vesting:
When title is held in the name of a limited liability company (LLC), the transaction may be eligible provided the Borrower is either the sole member and 100% owner of the LLC, or all borrowers collectively own 100% of the LLC and title is transferred to the Borrower's or all Borrower’s names at closing.
NOTE: Neither a non-borrowing title holder nor a non-borrowing spouse is considered a Borrower, but each may be entitled to certain disclosures and required to sign certain closing documents. A non-borrowing title holder is a non-borrower who holds title to the property. A non-borrowing spouse is the Borrower’s spouse and may or may not be on title. Non-borrowing title holders and non-borrowing spouses are not required to sign the promissory note or home equity line of credit agreement and disclosure statement; however, each is required to sign the security instrument and other truth in lending disclosures. Exceptions may apply with
regard to non-borrowing spouses who are not on title, as permitted under state law and authorized by the Compliance Department.