Compliance Journal September 2023
Special Focus Who Need Sign the Mortgage? A frequently asked question to the WBA Legal Call Program remains, “who need sign the real estate mortgage.” The answer is not always straightforward as a number of factors need be taken into consideration. Lenders often look to rely on the standard principle—only those parties on the deed to the property securing the loan are required to sign the mortgage. However, lenders also need consider any interests of married Wisconsin residents given that Wisconsin is a community property state and has a Marital Property Act which provides homestead protections to spouses. This article is meant to answer the question of who need sign the real estate mortgage, highlight a 2017 Wisconsin court case which confirmed that, consistent with Wisconsin statutes, both spouses must sign a mortgage if it conveys any interest in the homestead of either spouse or both spouses, provide instruction for completing the WBA 428 real estate mortgage, and provide several examples to illustrate various interests. Wisconsin Statute Provisions Wisconsin statute section 706.02 provides the formal requisites for conveyances of real property. For transactions by which any interest in land is created, aliened, mortgaged, assigned, or otherwise affected in law or in equity, such interests are not valid unless the interest is evidenced by a conveyance that satisfies all of the requirements listed within the statute section. One of the requirements critical to the question of who is to sign the mortgage is found within section 706.02(1)(f) which requires the conveyance to be signed by each spouse if the conveyance alienates any interest of a married person in the homestead. An exception to this requirement is for a purchase money mortgage; on a purchase money mortgage pledging that property as security, only the purchaser need sign the mortgage. “Homestead” is defined under Wis. Stats. sec. 706.01(7) as “the dwelling, and so much of the land surrounding it as is reasonably necessary for use of the dwelling as a home, but not less than one-fourth acre, if available, and not exceeding 40 acres.” Customers need inform the lender whether the property is homestead property, and such information is included on the mortgage itself. As a result of the statutory language under 706.02(1)(f), unless the mortgage is a purchase money mortgage, if a married person is on deed to the property securing the loan, the spouse of that individual will also be required to sign the mortgage if the conveyance alienates either or both spouses’ homestead interest, even if the spouse is not on the deed. The lender need require signatures of all titleholders and the spouse of married titleholder if the property is the homestead property of either or both spouses. U.S. Bank National Association v. Charles E. Stehno III, 2017 WI App. 57 (August 30, 2017) In 2017, a Wisconsin court case confirmed, consistent with Wisconsin statutes, that both spouses must sign a mortgage if it conveys an interest in the homestead of either spouse or both spouses. See U.S. Bank National Association v. Charles E. Stehno III, 2017 WI App. 57 (August 30, 2017). In the Stehno case, the bank attempted to foreclose on mortgages signed by Charles Stehno in December 2002 and