Questions? Feedback? powered by Olark live chat software

Chrisman's Corner: Sometimes Supreme Court Rulings Impact Mortgage Banking

Now that same-sex marriage is a constitutional right, JMAC’s brokers may wonder how it will affect residential mortgage lending. As a reminder this summer the Supreme Court ruled that the Fourteenth Amendment of the U.S. Constitution requires a state to license same-sex marriages and recognize same-sex marriages lawfully licensed and performed in another state. State laws that forbid same-sex marriage will be violating the Fourth Amendment and are unconstitutional.

This ruling will require lenders such as JMAC to update policies and procedures to reflect that same-sex couples who are legally married are entitled to receive consumer disclosures and loan documents required under all applicable state and federal law and take title to real property as married persons. Signatures of both spouses (either heterosexual or homosexual) may also be required on certain documentation to create a valid lien against the property.

Some states, such as Texas, that banned or prohibited the recognition of same-sex marriage, did not allow same-sex couples to take title as a married couple. Therefore lenders could not treat them as legally married. With the new rule, lenders in these states will inevitably have to update their policies to recognize same-sex marriage.

Same-sex divorces should also be addressed, as even same-sex marriage can be legally terminated in any state and lenders may require certain divorce documentation during the loan process. JMAC and other lenders will also ensure their service providers are on the same page when it comes to same-sex marriage policies and procedures. 

The CFPB has also clarified its policy to recognize all marriages valid, which include same-sex marriage and that the CFPB would regard a persona legally married in any state to be married nationwide and treat same-sex marriages the same as heterosexual marriages. The federal laws that correlate to marriage include, Equal Credit Opportunity Act (ECOA), Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). Watch for future announcements from JMAC regarding any changes to policies and procedures.