Court Opinion

ID: 9506686
Source: CourtListenerOpinion
Date Created: 2023-08-06 21:10:48.305621+00
Date Added: 2024-06-11T09:07:05.601502
License: Public Domain

J. JONES, J.,
specially concurring.
I fully concur in the Court’s opinion but think it appropriate to offer a cautionary comment to lending institutions who require a change in ownership of real property that a husband and wife are attempting to refinance. Here, the bank apparently required that the property be held jointly by the parties and that both sign the promissory note and real estate mortgage. The record does not disclose why the bank deemed it necessary for Ann to deed the Etna property to her and Greg as tenants by the entirety, except perhaps to get another debtor on the hook for the loan. The record does not indicate that the bank advised Ann of the potential consequences of quitclaiming the property to her and Greg. The bank obviously understood that the property was in Ann’s name and likely her separate property, otherwise there would have been no reason for the quitclaim deed to be included in the closing packet.
This case did not involve a claim against the bank and it is not clear what the outcome of such an action would be. However, when a lending institution has a deed prepared that purports to change the ownership status of property and places the same in the refinancing packet for signature by a husband and wife, without calling them attention to the fact that signature of the document could well accomplish an unexpected or unwanted change in the ownership status of the property, it is not impossible that liability might attach under some theory of law. It would seem to be a prudent practice for a lending institution to inquire of a husband and wife whether the property to be financed is their joint or separate property and, if separate, to explain (1) why it might be necessary for a change in the ownership status of the property to occur, and (2) what the possible consequences might be. Just preparing a deed that would accomplish a change in the ownership of the property, tossing it in the closing packet, and hoping for the best, might not be a prudent thing to do. As my high school English teacher, Mrs. Murphy, used to say, this is merely a word to the wise.