If you signed the Mortgage while you were married, but your spouse did not sign the Mortgage, then the Bank cannot attach a lien to your property. This is very important because you and your spouse would be “tenants by the entirety”, meaning that you each won a 100% beneficial interest in your home. In other words, the rule is not that the husband owns 50% and the owns the other 50%. The rule is that the husband owns 100% and the wife owns 100%. Think of it as you and your spouse becoming one person when you got married. If you are single when you take out a loan, then the Bank is supposed to make you sign an Affidavit of Single Status. If the Bank was sloppy, they may have given you a loan by only making you sign the Mortgage but neglecting to ensure that your spouse has also signed the Mortgage. The key is, you ii) must have been married BEFORE you took out the loan and ii) only one spouses signature is on the Mortgage.The Bank will have an extremely difficult time Foreclosing on your property if only one spouse signed the Mortgage.
If you and your spouse have money accounts, the same rule applies. If you are worried about a creditor attaching a lien on your bank account, the account is not reachable if i) it was opened by “tenants by the entirety” and ii) only one spouse is liable for the debt. Tenants by the Entirety is one of the greatest forms of asset protection. The key here is that the bank account must have been created by both spouses at the same time. That means, you can’t go to the bank and ask the bank teller that you want to switch your account into joint names. If you want to ensure that you account is protected, you should close the account and open a new account in both husband and wife’s name as Tenants by the Entirety. The interest of husband and wife must have been created SIMULTANEOUSLY to be protected!
What if you have property in a state, like North Carolina, that does not recognize “tenants by the entirety”. Then you should convert ownership into an intangible so that Florida law will apply. You can covert real property into tangible property by placing the property into a Trust or creating a LLC, Corporation or a Partnership. Once you have created the intangible, hold the intangible property interest as “tenants by the entirety’!
A married couple or any group of people can title an interest in property as Joint Tenants with Right of Survivorship. Property that is held by tenants by the entirety can not be reached by creditors of only one spouse,. Hence, if only one spouse signs the Mortgage during the marriage, the Bank cannot Foreclose because that would punish a spouse that was not part of the Mortgage agreement. If property is held as joint tenants, then the creditor is only able to reach the percentage of the interest owned by the liable joint tenant. The Bank will not be able to foreclose until a partition is granted by the Court, and then the Bank can only reach that liable parties individual interest. This would mean you would have to have a partnership or LLC that received a loan from the Bank, however, less than all of the owners signed for the Mortgage.
You and a business partner, friend or family member could also create similar asset protection by labeling your interest as Joint Tenants. Once again, if you and another person own property as Joint Tenants, this means that you each individually own 100% of the property. How can a Bank take your share of real property when someone else owns 100%? The Bank can’t attach a lien to any of the property unless they obtain a Partition from the court. A partition does not necessarily mean that the Court will divide the property 50/50. It means that the court will divide the property in accordance to its proper allocation of ownership. That may mean that the Bank can attach a lien to your fractionary interest, while the interests of the other owners will be unreachable by creditors. A creditor can only reach the property interest of the individual who is liable for the debt, but may not disturb the other Joint Tenants interest.