Mortgage Default!!!?

[videogamer1979]

What happens if you cosign for someone's mortgage and they don't pay?

[me]

If they don't pay - then YOU must pay.
The appropriate bad marks will go against their creditworthiness - and if you don't pay, your credit rating could be altered as well.

Unfortunately, it is possible that collection action could commence - without You Even having been informed that the mortgage is in default.

Cosigning a mortgage is at best, risky: and at worse, foolish and dangerous. Do not do this for for someone you don't know well or are not related to by blood.

[Nancy Kay]

then you pay...you signed for the loan

[mbrcatz17]

The bank comes after YOU for the mortgage payments. They can garnish your wages, and put a lein on YOUR property.

[Luck Be A Lady]

The house will be foreclosed on and sold. If the mortgage company does not get what is owed on the home, you both are severally and equally liable for the difference in what is owed.

[Loulla]

Contact the mortgage lender to ask them what action to take.
Do this in writing and give a copy of the letter to the other person who is supposed to be making payments.

Keep all proofs of YOUR payments to the mortgage lender for you part of the mortgage, so if it goes to court is won't be defaulted under your name.

The mortgage by law CANNOT be defaulted until a judge has passed an order for this. NOR can the property be re-possessed until the judge has passed an order clearing this, and even then the bailiffs used to possess the property will more than likely be court bailiffs, since the warrant for possession must be given by the District Judge in court.

Before going this far, a hearing will be held where you'll be able to give evidence of your payments, and an suspended possession order will be made, which is when the other person who is supposed to be making payments is ordered to pay a certain amount to clear the arrears on top of the proper amount to be paid. If this is ignored, then it'll go back to court and the bank can apply for a warrant for possession.

This stands in the UK at present. Not sure about anywhere else though!!

[Dee]

You are responsible to pay if they don't. This will go on the co-signer's credit report if there are late payments and if you don't pay, the foreclosure will also go on your credit report. People who need co-signers, need them for a reason. They either have bad credit or don't make enough money to pay the mortgage. Co-signing is not a good idea.

[Space_Cadet]

If you haven't done it --- DON'T ... If you have done it then you are liable.

[Steve S]

Whoa!! I guess you learned a lesson here, right? Don't tell me - it was a 'friend' with a sob story that you could not resist.

I would do my best to talk to the mortgager and see if they can take your name off the note, but that is not likely. If all fails and you end up in default, credit reporting agencies will accept and record explanations and comments on your report that may exonerate you.

Is there any likelihood of this person being able to pay at all? If not, you might want to start the process and come clean with the mortgager right now to show an act of good faith.

Remember this: No good deed goes unpunished!!!

[Toby M]

that's funny, i just came across the answer to this on this site. check it out!