25

I cosigned a mortgage for my brother 9 years ago. I was young and he convinced me that it would be good for my credit. Recently my credit dropped 70 points because he was 60 days late on the payment. He has been late before, he is usually on time for 10-12 months and then he has a late month or 2. I called and spoke with the bank when I realized what was happening and he has 1200 worth of fees (late, insufficient funds, etc.)

My question is do I have a case if he refuses to sell the home when he has a history of not being able to pay on time or not having funds available. Personally, I haven't been late on any payments in 6 years.

Improve this question
17
  • 15
    When you say "do I have a case," do you mean in a lawsuit?
    – Ben Miller
    Jan 29, 2017 at 14:07
  • 4
    What is the term of the mortgage? Are you really a co-signer, or are you a co-borrower, whose name is on the title? If you're half owner, what is going to happen when the mortgage is paid off? Is he going to buy you out?
    – user13722
    Jan 29, 2017 at 15:48
  • 11
    This is why you never cosign, and specially cosigning for family. A friend of my wife asked me to cosign a rent a few months ago, and I told her in no uncertain terms, that I would not ever do this even if family was asking. I want to sleep well in the next 20 years.
    – Rui F Ribeiro
    Jan 29, 2017 at 16:02
  • 47
    "Personally, I haven't been late on any payments in 6 years." Yes, you have. You've been late every time a payment wasn't received by the deadline on a loan that you've cosigned for. Did you read what you were signing when you signed it? You are personally responsible for those payments. That's why your credit rating dropped.
    – Paul
    Jan 29, 2017 at 22:17
  • 2
    @corsiKa that may vary by region, but in the USA, 30-year fixed-rate mortgages are very common. Once you close, you just make the payments for 30 years and generally the only way something changes or gets updated is if your mortgage is sold to another bank, you refinance, or you make extra payments.
    – rob
    Jan 30, 2017 at 5:35

2 Answers 2

Reset to default
56

This is why we tell people not to co-sign unless they are able and willing to risk that money becoming a gift... or are able and willing to treat it as business rather than family.

Unfortunately that advice is a bit late now to help you.

When you cosigned, you promised the bank that you would make any payments he didn't. The bank doesn't care why he didn't, they just want their money on time. Getting him to repay you for covering this is strictly between the two of you, and unless you signed paperwork at the time establishing a contract other than the promise to cover his loan this becomes Extremely Messy.

First step is to make the payments so the loan doesn't continue acquiring fees and hurting your credit rating, and keep it from falling behind again. Then you have to convince him to repay the money you have effectively given him. Depending on your relationship, and financial situations, you may decide to carry him for a while and trust that he'll pay you back when he can, or sic a lawyer on him.

You need to make that decision, recognizing that it may be a matter of how much family drama you are willing to tolerate.

Improve this answer
3
  • 12
    This answer implies that if he doesn't pay in time, there is nothing you can do about it. This is true from a legal/financial perspective, but I would like to point out the following: If it is a matter of dicipline/priority, simply discussing a procedure where he lets you know each time when he made a payment could make a huge difference already.
    – Dennis Jaheruddin
    Jan 29, 2017 at 15:40
  • 13
    By all means, talk to him before you do anything else.
    – keshlam
    Jan 30, 2017 at 2:23
  • 5
    Actually you should never cosign, ever, ever. Because as you can see from the OP, it's more than just risking giving the equivalent money it as a gift. Your credit can end up trashed and the lender is under no obligation to let you know. And furthermore, even if you do know, you may not be able to extricate yourself from the situation.
    – stannius
    Jan 30, 2017 at 20:01
12

He wasn't wrong that a mortgage would help your credit score, assuming that this was a perfect world and everyone held up their end of the bargain. However, now that he hasn't, you are still legally obligated to pay the loan amount (including his portion of it). As for a lawsuit, it would be hard to prove what he said verbally, however, it doesn't hurt to call a lawyer for a free consultation.

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .