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We have a customer who would like a home equity line of credit (HELOC). His wife is not on the title for the house and she will not be a co-signor on the HELOC. Do we need to include her as grantor on the mortgage? Or is it sufficient to have her sign a waiver of her homestead rights? – IBA Compliance Connection

IBA Compliance Connection

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We have a customer who would like a home equity line of credit (HELOC). His wife is not on the title for the house and she will not be a co-signor on the HELOC. Do we need to include her as grantor on the mortgage? Or is it sufficient to have her sign a waiver of her homestead rights?

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The wife does not need to sign the mortgage, since she is not a borrower and is not on the title to the property securing the HELOC, but she should sign a waiver of her homestead exemption rights.

Note that a waiver of homestead exemption rights is not valid unless it is signed by both spouses. Also, we recommend checking with the secondary market purchaser of the mortgage note (if any) to ensure that it does not require signatures from non-titled, non-borrowing spouses on any disclosures or other documents.

For resources related to our guidance, please see:

  • Illinois Code of Civil Procedure, 735 ILCS 5/12-904 (“No release, waiver or conveyance of the estate so exempted shall be valid, unless the same is in writing, signed by the individual and his or her spouse, if he or she have one . . . .”)