Question 21
Domain 1: Federal Mortgage-Related LawsA married couple applies for a mortgage. Under ECOA, can the lender require both spouses to sign the note if only one spouse's income qualifies for the loan?
Correct answer: B
Explanation
Under ECOA, a creditor may not require a spouse to sign if that spouse’s income is not needed to qualify. The rule is that a lender can ask for a signature only from the applicant whose income is relied on, so if “only one spouse’s income qualifies,” only that spouse needs to sign the note.
Why each option is right or wrong
A. Yes, both spouses must always sign
B. No, only the qualifying spouse needs to sign the note
Regulation B under ECOA, 12 C.F.R. § 1002.7(d)(1), prohibits a creditor from requiring the signature of an applicant’s spouse or other person unless that signature is necessary to make the property available to satisfy the debt or the applicant is relying on that person’s income, assets, or credit history. Here, the loan is qualified by only one spouse’s income, so the lender may require the signature of the spouse whose income is being used, but not the non-qualifying spouse’s signature on the note.
C. Only if they live in a community property state
D. Only if the non-qualifying spouse has debt