Mortgage Loan Originator (MLO) Licensing Practice Test

In which situation is requiring a spouse to serve as a co-signer on a loan not considered discriminatory?

1. The loan amount exceeds $100,000

2. The signature is required by law in a community property state

3. The spouse has a higher credit score

4. The loan is for a primary residence

The correct answer is: The signature is required by law in a community property state

Requiring a spouse to serve as a co-signer on a loan is not considered discriminatory when it is mandated by law in a community property state. In these states, both spouses typically have an equal ownership interest in property acquired during the marriage, and the law requires that both must be involved in financial transactions concerning marital property. As a result, lenders are justified in asking for the spouse's signature on the loan to protect their interest and ensure compliance with state laws. The other scenarios provided do not inherently involve legal requirements related to the necessity of a spouse's signature. Factors like loan amounts exceeding a certain threshold or the credit score of one spouse may influence lending decisions but do not provide a legal basis for requiring a spouse to co-sign. Moreover, the nature of the property, such as whether it is a primary residence, does not determine the legal necessity for a spouse's involvement under the community property laws.