One question we get frequently is, do the joint intent boxes have to be marked? When it comes to evidencing applicants’ intent to apply for joint credit, the boxes are one way of demonstrating that but it’s not the only way. What would you do if you received a phone, internet or mail application and they didn’t mark those boxes? The answer is, the loan officer needs to document, “this is what they said” or “this is what they wanted”. The boxes obviously are a great way to do that, and I would get them marked if you ever see them. If it’s a phone interview; however, you might just write down that Dave called and said he and his wife wished to get a car loan. Such a notation is evidence of joint intent.
The catch to this is that joint intent has to be done at the time of application. So, if they’re not in front of you at the time of application, the only answer is, is that the loan officer does it. That’s the regulatory side of it but there is also a civil liability side to consider. I have been an expert witness in a couple court cases involving joint intent where the banks did not have evidence. In both cases, the judge ruled that the loan was null and void and therefore the bank didn’t have consideration and they look to the collateral. It’s a mess. So, I always recommend that whenever you see the applicants you might want to get the joint intent documentation signed, not to appease the regulation, but rather to have a belt and suspender method, for the civil liability side of it.
This is the kind of thing we’re going to talk about in our upcoming “Regulation B Joint Intent” webinar on February 12th. This one-hour webinar will get into all kinds of scenarios with guarantors, cosigners, comakers, co-borrowers, etc. We’ll cover how to get this documentation, when you need the documentation, and we’ll also look at both the Regulation B and the civil side of joint intent.