Question for the group:

When there is a loan to a borrower who is not on the deed to the property, such as when a parent pledges property so a son or daughter can borrow against the property, should the mortgage related obligations be included in the ability to repay since the borrower is not responsible for the payments?

What about when one spouse is on the Note, and the the other is on the deed?

I am prone to include them in the second example, but not the first.

I do not understand this statement: "since the borrower is not responsible for the payments?"

How can a borrower not be responsible for the loan payments? They are signing the note - correct?

The borrower would not be responsible for the payment of taxes and insurance since they do not have ownership in the property.

The regulation does not really address or contemplate a third-party pledge of collateral, but I am not sure you have a choice since these are creditor required, regardless of who is paying for them.

Paragraph 43(c)(2)(v).
1. General. A creditor must include in its repayment ability assessment the consumer's monthly payment for mortgage-related obligations, such as the expected property taxes and premiums or similar charges identified in § 1026.4(b)(5), (7), (8), or (10) that are required by the creditor.

It's tricky and the regulations don't address these odd situations.

I took required to be paid to be more in line with insurance than taxes.

1026.43(b)(8) Mortgage-related obligations mean property taxes; premiums and similar charges identified in § 1026.4(b)(5), (7), (8), and (10) that are required by the creditor; fees and special assessments imposed by a condominium, cooperative, or homeowners association; ground rent; and leasehold payments.

Thank you! I appreciate your help once again!