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Spousal Signatures under ECOA

Q: Can a lender require a non-borrowing spouse to be a borrower or sign any loan documents?

A: The Equal Credit Opportunity Act ("ECOA") strictly forbids a creditor from discriminating against applicants on a number of prohibited bases including marital status.

A lender may not require the signature of a non-borrowing spouse on any loan document (except any loan document that is reasonably believed to be necessary under applicable state law) if the applicant qualifies for the loan applied for without use of the spouse's assets, income etc.

If the applicant does not qualify for the loan applied for then the lender may counteroffer with a requirement of an additional borrower or guarantor but the lender is not permitted to require this additional borrower or guarantor to be the applicant's spouse.

With regard to the exception of any loan document that is necessary under applicable state law, a lender may require a non-borrowing spouse's signature on any loan document necessary to protect the lender in the event of default (i.e. the security instrument in a community property state).

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