# Foolish real estate finance question **URL:** \ **Category:** Factual Questions\ **Created:** [October 4, 2002, 2:27pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833 "2002-10-04T14:27:39Z")\ **Posts on this page:** 17\ **Page:** 1
**Author:** ![choosybeggar](https://avatars.discourse-cdn.com/v4/letter/c/8c91f0/32.png) [@choosybeggar](https://boards.straightdope.com/u/choosybeggar)\ **Post date:** [October 4, 2002, 2:27pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/1 "2002-10-04T14:27:39Z")
To be listed on a mortgage for a property must one necessarily be listed as an owner on the deed for said property? ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [October 4, 2002, 3:00pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/2 "2002-10-04T15:00:48Z")
A mortgage will state who is securing/guaranteeing the loan and this entity is generally reflected as the titleholder to the property. I suppose it is possible that a person or corporation could agree to be listed as the (or one of the) guarantors of a loan and not require (or desire) that they be listed personally or corporately as the title holder in some fashion, but I have been selling commercial real estate for almost 20 years now and cannot recall ever having seen this circumstance. Possibly parents listed on the mortgage as guaranteeing a residential loan for their kids might fall in this category but I am not a real estate lawyer so my experience is limited to my empirical observations of commercial transactions. ---
**Author:** ![Shah\_Jehan](https://avatars.discourse-cdn.com/v4/letter/s/90ced4/32.png) [@Shah\_Jehan](https://boards.straightdope.com/u/Shah_Jehan)\ **Post date:** [October 4, 2002, 3:44pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/3 "2002-10-04T15:44:13Z")
I’m a CPA and all of my clients are companies (Partnerships, REITs, etc) that specialize in real estate. Generally speaking my experience has been similar to astro’s. However, I have seen parent companies with loans secured by properties held by their wholly owned subsidiaries. These loans are not necessarily mortgages per se, but they serve the same purpose. Now in respect to individuals and houses, condos, etc. I can’t imagine a bank making a loan to anyone other than the title holder. However, as astro has pointed out, there can be any number of guarantors. Alternatively, if you owned a house and wanted to help someone else (you kid, friend, relative, etc)borrow enough money to buy their own, depending on the circumstances, you maybe able to take out a home equity loan large enough to cover the purchase of the other house. ---
**Author:** ![Bumbazine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bumbazine/32/362_2.png) [@Bumbazine](https://boards.straightdope.com/u/Bumbazine)\ **Post date:** [October 4, 2002, 5:11pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/4 "2002-10-04T17:11:22Z")
Wow! a question I can answer! Who’d a thunk it! When you borrow money from a lender you sign a ‘note’, which is a promise to pay the lender back, yadda, yadda. But the lender has nothing securing that promise. He can sue for payment in a court of law and maybe get some or all of the money back, but that can be iffy, and money lenders **hate** iffy. So the lender will make you give him a _mortgage_, or, more likely, a _trust deed_. These are different, but they accomplish the same thing; they pledge real property as security for your debt. Thus, if you don’t pay, the lender has something he can take away from you, your real estate. So the _mortgage_ would identify you, the _mortgagor_, and the lender, the _mortgagee_, and would require your signature, but not necessarily his. This is all assuming that you live in a _lien theory_ state, which most states, including mine (Oregon) are, and not a _title theory_ state, where a mortgage acts to actually transfers title to the lender. But that’s a whole 'nother kettle of worms. 😉 ---
**Author:** ![toadspittle](https://avatars.discourse-cdn.com/v4/letter/t/c0e974/32.png) [@toadspittle](https://boards.straightdope.com/u/toadspittle)\ **Post date:** [October 4, 2002, 6:01pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/5 "2002-10-04T18:01:30Z")
> [@](#): > > \*Originally posted by Bumbazine \* > **the _mortgagor_** Isn’t that one of the minions of Sauron? Oh, wait. Nevermind. ---
**Author:** ![Bumbazine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bumbazine/32/362_2.png) [@Bumbazine](https://boards.straightdope.com/u/Bumbazine)\ **Post date:** [October 4, 2002, 9:06pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/6 "2002-10-04T21:06:55Z")
> [@](#): > > \*Originally posted by toadspittle \* > \*\* > > Isn’t that one of the minions of Sauron? > > Oh, wait. Nevermind. \*\* No, I think that would be a **Litigator.** The **Mortgagor** was a Civil War ironclad. Remember the “Battle of the **Mortgagor** and the **Merrimac** ”? 😃 ---
**Author:** ![handy](https://avatars.discourse-cdn.com/v4/letter/h/b5a626/32.png) [@handy](https://boards.straightdope.com/u/handy)\ **Post date:** [October 4, 2002, 10:23pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/7 "2002-10-04T22:23:17Z")
How about a in Reverse Mortgage? You know, in that case the bank pays YOU money 🙂 ---
**Author:** ![Nametag](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/nametag/32/406_2.png) [@Nametag](https://boards.straightdope.com/u/Nametag)\ **Post date:** [October 4, 2002, 10:54pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/8 "2002-10-04T22:54:06Z")
Good answer, **Bumbazine**. But it obscures what the OP really wanted to know, which is “Can the mortgagor and the owner of record be different people?” The answer is “of course.” The owner must supply the trust deed, but anyone can agree to pay the loan. That’s what “cosigning” is all about. No trig jokes, please. ---
**Author:** ![Bumbazine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bumbazine/32/362_2.png) [@Bumbazine](https://boards.straightdope.com/u/Bumbazine)\ **Post date:** [October 5, 2002, 2:11am UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/9 "2002-10-05T02:11:26Z")
I have to disagree with you **Nametag** , the mortgage isn’t the same as the promissory note, which may have co-signers, the mortgage (or trust deed) is an instrument given by the mortgagor which creates a specific lien against property as _security_ for the note, and as such, must be signed by the owner of the property. Or maybe I’m just not understanding what you are saying, and I’ve gone off on a tangent. (sorry) If you still feel that I’m missing the point could you please elaborate? ---
**Author:** ![suziek](https://avatars.discourse-cdn.com/v4/letter/s/8491ac/32.png) [@suziek](https://boards.straightdope.com/u/suziek)\ **Post date:** [October 5, 2002, 5:36am UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/10 "2002-10-05T05:36:42Z")
The only time I’ve seen a guarantor is with a commercial real estate loan. Residential mortgages are by definition a loan to the owner secured by the real estate. The source of payment if the mortgagor defaults is the sale of the real estate. “To mortgage” is to create a lien against real estate to secure a loan based on the appraised value of that real estate. A note is not based on the value of any particular asset, but on the repayment ability of the borrower. ---
**Author:** ![Freddy\_the\_Pig](https://avatars.discourse-cdn.com/v4/letter/f/a587f6/32.png) [@Freddy\_the\_Pig](https://boards.straightdope.com/u/Freddy_the_Pig)\ **Post date:** [October 5, 2002, 6:15am UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/11 "2002-10-05T06:15:33Z")
Bumbazine’s answer is right on the money. In common parlance we speak of a mortgage as if it’s a loan (“I just made my monthly payment on my mortgage”), but technically the mortgage and the loan are two different things. Anyone can co-sign a loan. It’s common for parents to co-sign loans for young adult children with insufficient credit. However, only the owner of property can mortgage it. (It would make no sense for Person A to pledge Person B’s property as security for a loan.) So the answer to the OP is “No–unless you are using ‘mortgage’ incorrectly as a euphemism for ‘loan’, in which case the answer is ‘Yes’.” ---
**Author:** ![lucwarm](https://avatars.discourse-cdn.com/v4/letter/l/e19adc/32.png) [@lucwarm](https://boards.straightdope.com/u/lucwarm)\ **Post date:** [October 5, 2002, 12:47pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/12 "2002-10-05T12:47:25Z")
Basically what **Bumbazine** said. Since a mortgage is an interest in a specific piece of real property, the bank will require that all listed owners of the property execute the mortgage. If additional people executed mortgages, it would be meaningless, since ya can’t give what ya don’t have. As far as the note goes, the bank can have as many people sign the note as it wants (assuming they agree), and all those people will be liable for the loan. In my case, I signed both the note and the mortgage; Mrs. Lucwarm signed only the mortgage. Thus, if we default, the bank could (1) foreclose on the house; or (2) try to grab my assets, but could not try to get Mrs. Lucwarm’s assets. (Yeah, I’m opening myself up - take your best shot!) ---
**Author:** ![choosybeggar](https://avatars.discourse-cdn.com/v4/letter/c/8c91f0/32.png) [@choosybeggar](https://boards.straightdope.com/u/choosybeggar)\ **Post date:** [October 6, 2002, 6:08pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/13 "2002-10-06T18:08:12Z")
Thanks for all the info. Let me provide some more details of the situation. Three individuals are named on a mortgage. Is there any necessity that all three be owners of the property? Would it suffice for the bank’s interest that only one of the three is an actual owner? BTW, the property is located in WA. ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [October 6, 2002, 6:24pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/14 "2002-10-06T18:24:07Z")
Per lucwarms’ point it’s really all about what the bank wants to secure the loan. Ask the bank loan officer. BTW what is the specific practical rationale for doing it this way in your situation? There may be other, less cumbersome ways to achieve the same end legally or operationally. ---
**Author:** ![Bumbazine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bumbazine/32/362_2.png) [@Bumbazine](https://boards.straightdope.com/u/Bumbazine)\ **Post date:** [October 6, 2002, 7:19pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/15 "2002-10-06T19:19:55Z")
This is starting to get confusing **Choosy** , so let me ask you some questions. Please don’t get insulted here, that’s not my intention. I just feel that there’s some sort of basic miscommunication going on here. Or maybe I’m just dense. So anyway, here goes: > [@](#): > > \*Originally posted by choosybeggar \* > \*\*Three individuals are named on a mortgage. \*\* Are these three individuals **named** on the mortgage, or did they **sign** the mortgage, or both? If they are just named on the mortgage, how are they identified, as the owners, (mortgagors), or what? And once again, are you sure we’re talking about the **mortgage** here and not the **promissory note?** > [@](#): > > \*\* Is there any necessity that all three be owners of the property? Would it suffice for the bank’s interest that only one of the three is an actual owner?\*\* If one of the three is the sole owner of the property being pledged, and he **signed** the mortgage, that should be sufficient for the bank’s purposes. If the other two did not have an interest in the property (prior liens, encumberances, etc) and they also signed, why did they sign? That doesn’t make any sense. > [@](#): > > \*\* BTW, the property is located in WA. \*\* Thanks for that, some real estate laws do vary from state to state, but WA law is pretty close to Oregon law. Of course much real estate law is federal law, and as such is uniform across the country, but there are some things covered by the states and they do vary. (Just trying to be explicit here.) For the record: I am not a real estate professional, although I once was, and will be again. I’m studying to take the Oregon Real Estate Brokers exam on Oct. 19th. So I have more than the layman’s knowledge of the subject, but there’s a lot that I don’t know. Please do not rely on what I tell you. I am sure any licensed real estate person in Washington will be glad to answer your questions in person, (and try to sell you a house). 😃 P.S. Are you in Wa or just the house? If so, where? If you don’t mind my asking? If you prefer not to say, no problem. ---
**Author:** ![aahala](https://avatars.discourse-cdn.com/v4/letter/a/a88e4f/32.png) [@aahala](https://boards.straightdope.com/u/aahala)\ **Post date:** [October 7, 2002, 1:44am UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/16 "2002-10-07T01:44:46Z")
In some states a spouse has an interest in any real estate his or her spouse has taken title to as an individual. So the spouse’s name may not show on the real estate records, but to transfer/sell the real estate or to place a lien on it, then that person would have to sign also. This marital interest can exist if the marriage did at the time of original purchase or any time between purchase and the lien. Divorce will not generally automatically remove this interest, a deed is usually required to extinguish it, even if a divorce decree states the husband or wife gets the property. ---
**Author:** ![Bumbazine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bumbazine/32/362_2.png) [@Bumbazine](https://boards.straightdope.com/u/Bumbazine)\ **Post date:** [October 7, 2002, 4:07pm UTC](https://boards.straightdope.com/t/foolish-real-estate-finance-question/130833/17 "2002-10-07T16:07:52Z")
It was a trick question! :smack: **aahala** is right! I’ve been concentrating on the mortgage and overlooked the deed. My apologies **choosy**. _goes off into the corner to sulk_