How To Remove A Co-signer From A Mortgage

How To Remove A Co-signer From A Mortgage

hi I'm David Soble and I'm a real estate
and finance attorney here in Michigan this week's question comes from James
and Grosse Pointe Michigan who writes I co-signed on a commercial loan for a
business that is owned by both my daughter and my son-in-law back in 2010
now they're getting a divorce so no one he says has paid on the loan since they
filed for their divorce James goes on to say that the bank just called me for the
payment and also sent me a letter demanding that I pay off the loan in
full it's kind of tough anyway so what what he goes on to say is that his
daughter tells him not to worry because the court has ordered that her
soon-to-be ex which would be James son-in-law would be responsible to pay
the bank not her so James asked David I'm worried we're sure he says it and
then he says I he says I have my own bills to pay and then he asked what do I
do once the court finds my soon-to-be
ex-son-in-law solely responsible for the business loan can I be released from the
loan by the bank it's a great question James
unfortunately my answer you're not gonna like but having been an attorney with
the banks for close to 25 years it's really not likely James you see with the
banks a cosigner is really a person who takes full responsibility to pay back a
loan in the event that there's a borrower or a maker who fails to make
their payment under the loan and so often a cosigner is going to be a family
member it could be a friend it could be a business partner but the cosigner is
obligated to pay any missed payments and even the full amount of the loan if the
borrower doesn't pay and doesn't meet their obligations so another name for a
cosigner is a guarantee a part of me a guarantor and the contract is known as a
guarantee so the guarantor or cosigner is
guaranteeing the payment back to the bank and banks rarely if ever released
co-signers from their obligation until the underlying loan in its entirety is
paid in full or in certain circumstances when the
lender receives a substantial pay down on that loan to reduce the bank's
perceived exposure and so just because James the court says you know that your
son-in-law is gonna have to be paying on the lawn loan under the divorce decree
it does not really release you of your contingent obligations to the mortgage
company you know in certain legal circles co-signers are known as you know
excuse me for saying this but idiots with pens and it may sound harsh and it
actually really is but being being a cosigner for a third party rarely if
ever has any upside to it in some cases however it may be necessary so for
instance when you're a business owner and you're taking out a loan for your
business the bank is going to require and ask that the individual business
owners sign on the loan personally and essentially then they're guaranteeing
the loan on behalf their company in your case James it sounds as if the bank felt
that your daughter and your soon-to-be ex-son-in-law we're really not
financially strong enough on their own to take out the loan and so the bank
really wanted a little bit more strength to the loan and they asked for you as a
guarantor what I would do all hope is not lost I would definitely take your
loan contract to a finance attorney like myself there's quite a few out there but
take it to an attorney to have them review it obligations under a guarantee
are usually very solid terms but you should know all of your rights that you
have against the bank as well as against your daughter and your son-in-law you
know I hope you found this answer helpful James and if you the viewers
have found this answer helpful and if you like this video please care to share
it with your family and your friends you can also leave your comments or a review
on what you liked about it in the comment section also feel free to write
in a question or suggest other topics that you'd like for us to discuss I'd
really appreciate it so if you'd wish to submit those questions or your comments
you can also email us at pardon me at team at proven resource.


so that's team at proven resource com and if you need
any further information please feel free to contact me
David Soble at triple-eight seven eight nine one seven one five or you can reach
me a once again thanks for watching and take care.

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