Technical finance question

Unit74

Unit74

Final Approach
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Unit74
Situation:

I'm in the process of getting my loan. I am the sole income earner in my family and married. My wife has no income at all. I have over half the aircraft cost in cash, but will be putting down 20% with about $30k as a reserve fund.

The finance officer said since we own joint assests from marriage, my wife must be a co-applicant on the loan.

I am calling bull sh....... on that. I bought our home as the only signer, cars, motorcycles etc... All by my lonesome. Why is this different?
 
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Depends on the bank/finance company and what they require. Were you married when you bought the other assets (assuming you obviously were but just throwing it out there)?

Like I said, probably down to an institution by institution basis. Some may require, others may not.
 
Yes. We have been married for almost 20 years.
 
It might depend on which state you are in, are you in a community property state? This might be business as usual, you need to talk to someone in your state.
 
They want automatic transfer of the liability to your wife in case you crash it, without the headache of Probate.
 
Perhaps the bank loan officer has had problems with women in the past. He is afraid that you might be buying it without her knowledge, she could get jealous of that shiny new airplane, and torch it.
 
She has the option to sign survivor rights away instead of being on the loan.
 
Unit74 said:
Situation:

I'm in the process of getting my loan. I am the sole income earner in my family and married. My wife has no income at all. I have over half the aircraft cost in cash, but will be putting down 20% with about $30k as a reserve fund.

The finance officer said since we own joint assests from marriage, my wife must be a co-applicant on the loan.

I am calling bull sh....... on that. I bought our home as the only signer, cars, motorcycles etc... All by my lonesome. Why is this different?
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It is required if your lender says it is. But you can always go to another lender.
 
Optionally, you can have the banker investigate a specimen like a quitclaim but for personal property, and not real property. It has another name I can't recall right now.

So, what he wants is to cover his loan with your income, but insure his loan with her assets when you crash, die, and she survives you. In the event you crash, die and she inherits your assets, the plane will be destroyed, and she will get the life insurance check as well as the check for the total hull loss. If she isn't on the loan docs, she is not then required to make good on your loan for a personal asset. The loan is collateral, and they can also require that they are on the insurance as the beneficiary. This gets complicated because of probate, and the easiest way around it is to have her on the loan as a secured party.
 
I am assuming they require insurance to protect themselves in the unlikely event you smash up your new bird, so having an unemployed spouse seems kind of silly to me. BUT, I am not a banker and they have a completely different set of rules compared to 6-8 years ago. :mad2::mad2:
I think it is likely a local bank rule, but I am consistently amazed at how banking has changed lately. I ended up paying cash for my son's college condo and then doing a credit line against my house. 2005 I would have called the banker, told him the closing date and amount, signed a couple papers and that would be it. :yes: I miss the good old days. ;)
 
Why wouldn't you want your wife on the loan?
 
JoseCuervo said:
Why wouldn't you want your wife on the loan?
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A better question is why should she be on the loan? No income and no debt. What "value" does she have being a signer?

I think the above post s have the right perspective... they are looking for a live person to be held accountable if I go down in a blaze of glory.
 
Do you want the plane or not? The bank is just covering their bases in case you flame out.
 
Would you want your wife borrowing money with your knowledge based on your joint tax return?
 
I live in a community property state, and was married when I both bought a plane and refinanced the house [but in the opposite order]. My wife is employed but earns significantly less than I do. Neither the mortgage nor plane loan have her name on them . . .

Check another bank?
 
Unit74 said:
A better question is why should she be on the loan? No income and no debt. What "value" does she have being a signer?

I think the above post s have the right perspective... they are looking for a live person to be held accountable if I go down in a blaze of glory.
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No. My question was better. Why don't you want your wife on the loan?

The bank hasn't heard a good reason, yet. Neither have we.
 
I bought my house before I met my wife, so obviously she's not on the mortgage.
When I financed my plane (two years ago), I don't even know if they asked if I was married, but she definitely wasn't on the loan.
I refinanced my home a few months ago... only my name is on the title, and only my name is on the loan, but they required her to sign a few statements which only served to state that she was aware of what I was doing financially. I'd never heard of that before either.
 
Sorta seems like it's between you and the loan company, regardless of what any of us think. But....you can always try telling them no on the wife sig and see what happens. Banks tend to think the more signatures on the loan, the better. But, ya never know.

Hey, I'll tell ya one. Seems this mechanic of mine used to run an FBO. Client doctor had a nice twin he was keeping care of and wanted to sell it. So he advertised and sold it. The buyer was 600 miles away and wanted it delivered so he had one of his instructors deliver it, with instructions to pick up the cashiers check for the balance.

So the instructor flew it out, and the buyer gave the instructor an envelope with a cashiers check in it and the instructor flew home on the airlines. Got back and the check wasn't the check but was the carbon copy that they give you with the check. So FBO owner calls buyer and says "we have to talk about how you are going to send me the money". Buyer says "No, what we're going to talk about is how much I'm going to pay for this plane"!!!!!!!!!!!

The buyer was a crook. Or trying to be one. Actually, he was one, it was fraud. But what do you do????????????

If anyone is interested, I'll tell the end of the story.
 
denverpilot said:
Why waste time with a referral?
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Because it's not a waste of time, it's good business. First, the client referred will remember you were straight with them and did all you could to help, and that may get you a referral in your area from the client someday (or the client coming back when s/he has something in your area). Second, the attorney to whom you refer that client will also remember the referral, and may well send you business in your field when one of their clients needs your expertise.
 
Perhaps the bank loan officer has had problems with women in the past.
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99% of "loan officers" are just clerks, pushing the papers and doing whatever they are told. They have no input to the documents or to the institution's requirements. So no ability to negotiate. The exceptions to this will be found in very small banks and credit unions which will, unfortunately, probably be afraid of airplane loans.

My wife was a Sr. VP & business unit manager at one of the "too big to fail" banks and even at that level she didn't have much negotiating room where bank policies and standard documents were concerned. She could get things done because the head of the legal department was a friend of hers, but that is also rare.

So, unless you are dealing with the rarest of loan officers your choices will be to either sign or walk. It might be worth asking whether any loan terms are negotiable before you put a lot of energy into arming yourself with precedents and legal facts.
 
airdale said:
99% of "loan officers" are just clerks, pushing the papers and doing whatever they are told. They have no input to the documents or to the institution's requirements. So no ability to negotiate.
Click to expand...

I was joking :)
 
C182P said:
I bought my house before I met my wife, so obviously she's not on the mortgage.

When I financed my plane (two years ago), I don't even know if they asked if I was married, but she definitely wasn't on the loan.

I refinanced my home a few months ago... only my name is on the title, and only my name is on the loan, but they required her to sign a few statements which only served to state that she was aware of what I was doing financially. I'd never heard of that before either.
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You should fix the titles in case you croak. Save her hassles and unnecessary expense with a Probate attorney.

Same thing for financial accounts. Make her the Payable on Death beneficiary. She shows a Death Certificate and it's done.

Sure many States have this covered with common property laws, etc... But that requires more paperwork.
 
dell30rb said:
I was joking :)
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I know. I was really responding to the OPs situation. Consulting with attorneys, checking community property, estate law, etc. is all fine and good but unlikely to change his situation no matter how much good negotiating ammunition he gets to bring back to his loan officer. The only benefit of the research might be to tell him that he's going to find the same requirement anywhere he shops.
 
JoseCuervo said:
No. My question was better. Why don't you want your wife on the loan?

The bank hasn't heard a good reason, yet. Neither have we.
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Sir, I see you take offense to being challenged that your question bares no relevance to my goals and have overlooked my previous post. So, I shall refresh for you is layman's terms: she is a stay at home mommy with no dollars of money she earns by going to work. I make a big paycheck and we live on this money together. For putting my X on a loan application, she does not provide any dollars or stuff she owns of value that would help the guy with the calculator decide how many dollars he should give me to buy an aero plane thingy....

Make sense now?:yes:
 
Unit74 said:
Sir, I see you take offense to being challenged that your question bares no relevance to my goals and have overlooked my previous post. So, I shall refresh for you is layman's terms: she is a stay at home mommy with no dollars of money she earns by going to work. I make a big paycheck and we live on this money together. For putting my X on a loan application, she does not provide any dollars or stuff she owns of value that would help the guy with the calculator decide how many dollars he should give me to buy an aero plane thingy....

Make sense now?:yes:
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No, it doesn't. When it comes to security for a loan the lendor and lendee's interests are diametrically opposed. Almost any reason you wouldn't want her on the loan is a reason the bank would want her on the loan, that is unless you just don't want her to know about it, which in that case the bank would especially want her on the loan.

Furthermore, a lot of people use their spouse to facilitate shady transactions and to shelter assets. From your conduct in this thread. I would say the bank would have a legitimate concern in this respect.
 
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Don't take all this crap too seriously, you have options:
1. Put her on the loan.
2. Talk to banker and bypass requirement for her on the loan.
3. Go to different lender.
:D
I have financed several things, some with and some without my wife's signature, she's a stay at home mom as well. Heck, she's gotten credit cards and accounts in her name and she hasn't gotten a paycheck in over 20 years. :D


Unit74 said:
Sir, I see you take offense to being challenged that your question bares no relevance to my goals and have overlooked my previous post. So, I shall refresh for you is layman's terms: she is a stay at home mommy with no dollars of money she earns by going to work. I make a big paycheck and we live on this money together. For putting my X on a loan application, she does not provide any dollars or stuff she owns of value that would help the guy with the calculator decide how many dollars he should give me to buy an aero plane thingy....

Make sense now?:yes:
Click to expand...
 
Tummler said:
Furthermore, a lot of people use their spouse to facilitate shady transactions and to shelter assets. From your conduct in this thread. I would say the bank would have a legitimate concern in this respect.
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Harsh dude. Uncalled for from what I've read, there's no shenanigans or covert stuff going on unless you're more paranoid than me, and I'm the tin foil hat guy.

Maybe with some reflection you'll retract this.;)
 
docmirror said:
Harsh dude. Uncalled for from what I've read, there's no shenanigans or covert stuff going on unless you're more paranoid than me, and I'm the tin foil hat guy.

Maybe with some reflection you'll retract this.;)
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He can't or won't articulate a legitimate reason why he doesn't want his wife on the loan, and when pushed on the issue, he became defensive and lashed out. My perspective and JoseCuervo's perspective is likely the same as the bank's.
 
Tummler said:
He can't or won't articulate a legitimate reason why he doesn't want his wife on the loan, and when pushed on the issue, he became defensive and lashed out. My perspective and JoseCuervo's perspective is likely the same as the bank's.
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When I lend money, 2 signatures are better than 1. 3 are better than 2, and 4 are better than 3.

If OP plans in paying the loan back, no reason he wouldn't want the wife's name on the loan. Only reason to keep her off the loan is to shield her from liability ( may or may not work, depending on state), when OP defaults on the loan.

Bank's money, bank's rules.

He still hasn't articulated a reason to keep her off the note.
 
JoseCuervo said:
When I lend money, 2 signatures are better than 1. 3 are better than 2, and 4 are better than 3.

If OP plans in paying the loan back, no reason he wouldn't want the wife's name on the loan. Only reason to keep her off the loan is to shield her from liability ( may or may not work, depending on state), when OP defaults on the loan.

Bank's money, bank's rules.

He still hasn't articulated a reason to keep her off the note.
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Sounds like we have a similar perspective on this matter. Want to lend me some money for my business? I am more than happy to have my wife sign the note and a personal guarantee!
 
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Tummler said:
Sounds like we have a similar perspective on this matter. Want to lend me some money for my business? I am more than happy to have my wife sign the note and a personal guarantee!
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Even if she has no connection to the business? :dunno:
I won't bore everyone with the details, but as a borrower, you should have as few signers and guarantors as possible. :D It wasn't me, but stuff happens and the less you have at risk the better off you are.:D Modern banking is MUCH different than banking 10 years ago, they are looking to over-collateralize every loan. :nono: Very few people take out loans intending to default, a few do, but most people intend to pay them back. Bankers are scared right now, the Feds are killing them with paperwork and regulations to avoid making ANY bad loans. It's like the old joke that a bank will only loan you money if you can prove you don't need it! :rolleyes:
But, that being said, they have the money, they make the rules. :mad2:
 
JoseCuervo said:
Why wouldn't you want your wife on the loan?
Click to expand...

Unit74 said:
A better question is why should she be on the loan? No income and no debt. What "value" does she have being a signer?

I think the above post s have the right perspective... they are looking for a live person to be held accountable if I go down in a blaze of glory.
Click to expand...

No idea wher the OP lives but my guess is that he may live in a state where married couples enjoy " Tenants by the Entirties" rule, which where I live, beyond the estate implications means that a creditor can't touch assets owned by the couple to satisfy a debt owed by one of them. If this applies where the OP lives Then the lender is likely concernrned that if the OP defaults and the plane disappears or is worthless and all assets are protected by the Entirties ownership, he may not have any way to recoup any potential loss.

That said if it were me I'd try to avoid the spouse signature if I could, but if I represented the lender I'd tell them to get the spouse to sign.
 
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