My daugher and her husband live in NM. She is from NY and is disabled with TBI. She only receives about $170/mo. for income and isnt working, also pregnant. He is planning in purchasing a home on a VAloan and it would require her signature.
The question is, will she be half responsible for the house loan in the case of divorce even though she is disabled and has no income?
1 Answer from Attorneys
NM is a community property state. Your daughter is likely being asked to 'sign on' for 2 reasons - either one of which will be satisfactory to the lending institution. (1) - they need her income to have a sufficient amount to approve the loan; or (2) they (the bank) may simply believe it is too much trouble to do the extra paperwork to not have her on the loan. The question, regardless of the fact that that she has TBI is, is she mentally competent? If she is incompetent and unable to process or understand the contract she is being asked to sign then that can present a problem. If she is mentally competent despite the TBI then the TBI (itself) is not necessarily enough to prevent her from being competent to signing a contract.
Now, your other question: what happens if they get divorced - that's a different animal. First, if they get divorced and they (the married couple) have a joint asset, such as a house, the court will divide the asset. If a lot has been paid down on the loan then they will have a large equity and she'll make some money. It will be to her benefit (financially) if that happened because she will get 1/2 the equity (taking into consideration that 1/2 is a sample number). If they are upside down and they cannot sell the home (somewhat unlikely) then yes, theoretically, she is responsible for 1/2 the loan amount. However, there are a LOT of intervening factors that will come into play before that 'option' becomes a reality. One of the intervening factors is that she could bankrupt the loan. Lots of people get upset at the concept of bankruptcy but the reality is that it is simply a business type decision to consider when balancing pros and cons to a financial issue brought about by such a thing as a divorce. So, . . . . hopefully this decision to get a home at a low interest rate will help this young couple with 'one' of the issues they have in their world of concerns.
Hope this helps.