(Ontario)
Question:
Why does the Bank refuse a second person on Title? A is approved, but they won’t let B, the spouse on title because of credit concerns.
Answer:
You might think that Banks don’t care, however they do where there is 95% financing. If B comes on title, then suddenly, there are a whole list of potential lienholders and execution creditors, The Bank still ranks first, but we now have the risk that these third parties may assert their claims against both B and A too.
If the Bank goes to enforce its security, it now has to deal with B and the whole list of B’s creditors. Much simpler situation if just A was on title.
If the Bank’s mortgage was 50%, then they probably wouldn’t care.
Brian Madigan LL.B., Broker