Practice Tip: Homestead Property – Who Signs the Mortgage?

Simon PLC Attorneys & Counselors – December 2022 Memorandum

Practice Tip:  Homestead Property – Who Signs the Mortgage?

Troy, Michigan – Your client is preparing to close on a commercial loan to support his new business venture.  The bank requires a pledge of his residence as supplemental collateral.  He calls you and asks, “Why does my wife have to sign the mortgage?  I thought Michigan abolished dower rights!”

Dower rights historically allowed a widow to claim a one-third interest in any real estate titled in her late husband’s name for possession and use during her lifetime.  It was common for husbands to own real estate in sole name, and dower protected wives from being left destitute should the husband convey, pledge, or otherwise encumber his property, or leave it open to creditors.  Since Michigan became a state in 1846, a married man could not complete any real estate transaction unless his wife “barred dower” by executing the mortgage or other documents of conveyance.   

Social and legal practices have evolved so that this is no longer seen as a problem to be dealt with by statute; in keeping with national trends, Michigan eliminated dower by enacting Public Act 489 of 2016 [MCL 558.30], effective April 6, 2017.  To date, only Ohio, Arkansas, and Kentucky still have dower on the books.

You will need to advise your client that Michigan’s homestead rights are the reason for the title company requiring his wife’s signature.  Unlike dower, the homestead protections extend to both spouses, should the primary residence be titled in the name of only one spouse:

600.6023 Property exempt from levy and sale under execution; lien excluded from exemption; homestead exemption; rents and profits.

(1) The following property of a judgment debtor and the judgment debtor’s dependents is exempt from levy and sale under an execution:


(g) A homestead of not more than 40 acres of land and the dwelling house and appurtenances on that homestead that is not included in a recorded plat, city, or village, or, at the option of the owner, a quantity of land that consists of not more than 1 lot that is within a recorded town plat, city, or village, and the dwelling house and appurtenances on that land, owned and occupied by any resident of this state, not exceeding in value $3,500.00. This exemption applies to any house that is owned, occupied, and claimed as a homestead by a person but that is on land not owned by the person.  However, this exemption does not apply to a mortgage on the homestead that is lawfully obtained.  A mortgage is not valid for purposes of this subdivision without the signature of a married judgment debtor’s spouse unless either of the following occurs:

  (i) The mortgage is given to secure the payment of the purchase money or a portion of the purchase money.

  *** [emphasis added]

The signature requirement does not apply in the case of a purchase money mortgage, and the homestead law itself does not apply if the property being pledged is a second (nonprimary) home or investment property.  

In any instance where a client is pledging collateral for a business loan consisting of the primary residence for which the Michigan Principal Residence Exemption has been claimed, both spouses will be required to execute the mortgage, regardless of how title is held.

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