Title Changes During a Mortgage Refinance: Broker-Lawyer Handoff

Adding or removing a person from title can affect ownership, borrower liability, guarantor structure, income used to qualify, credit exposure, source of equity and lender security. FSRA's fraud guidance specifically emphasizes verifying legal authority and requalifying where a person is added to or removed from title in a refinance context.

The brokerage should therefore never describe a title change as something the lawyer can 'just do at closing' unless the lender has approved the resulting borrower/security structure.

The closing summary should identify who is currently understood to be on title, who the borrower wants on title after closing, who will be liable on the mortgage, and whether any person is signing only a consent, guarantee or other document. The broker should distinguish the borrower's requested outcome from the lender-approved outcome.

If the legal title search differs from the mortgage application, the file should stop and reconcile. That discrepancy can be a benign application error or a material authority/fraud issue; counsel and the brokerage each have different obligations to address it.

Removing an owner, adding a spouse, asking a non-borrowing spouse to consent, or having one party assume debt without receiving proceeds may create a need for independent advice or separate representation depending on the circumstances. The broker should flag the relationship and economics, then leave the legal-retainer decision to counsel.

If the lender expressly requires ILA for a guarantor, spouse or transferring party, the brokerage should make that condition visible before the closing date and ensure the final transaction documents used for advice match the approved deal.

Where one owner is being bought out, one spouse is leaving, or proceeds are being directed disproportionately, the brokerage should accurately disclose the use of funds to the lender and avoid characterizing the legal entitlement to those proceeds. Counsel handles the transfer and legal accounting; the lender decides whether it is comfortable with the credit purpose.

If the funds-flow arrangement changes, the brokerage should ask whether the lender approval or borrower disclosure must be updated.

The strongest handoff includes the lender-approved borrower names, intended registered owners, mortgage amount/position, use of proceeds, known relationship between parties, ILA condition if any and closing date. It should not ask the lawyer to determine whether the lender would still approve a different ownership structure.

This keeps the lawyer focused on legal execution and the mortgage professional focused on suitability and lender authorization.