1) Can I be removed from the loan as a cosigner before entering foreclosure? 2) Is there any laws that the banks may have violated?

UPDATED: May 18, 2009

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1) Can I be removed from the loan as a cosigner before entering foreclosure? 2) Is there any laws that the banks may have violated?

I was 19 yrs when my parents bought a house in California. Their real estate agent put me in as cosigner WITH my consent they told me at the time that I could be removed from the loan within two years. Now my parents may be facing foreclose soon. My two questions 1) Can I be removed from the loan as a cosigner before entering foreclosure? I’m only 22 now and my credit will be ruined for a long time. 2) Is there any federal or state laws that the banks may have violated on the loan they made? ( Someone told me it seemed that the bank had violated some regulations they have) What should I do?

Asked on May 18, 2009 under Real Estate Law, California


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

Wow. Your real estate agent put you on the loan as a co-signer for your parents? Your credit must have been awesome and theirs not so much? How could your parents allow this? Did you not realize the consequences? Did the agent tell you what it means?

You probably won't be taken off the loan now very easily -- if they are foreclosure no way will the lender take you off -- you are a surety.  You guarantee payments.  And yes, it will impact your score negatively if the house is foreclosed on.

You can try to do a couple of things:

1. Contact the California Dept of Financial Institutions and the California Department of Real Estate.

2. Then, while you are exercising your administrative rights, consult with a real estate attorney/bankruptcy attorney in California.  Try www.attorneypages.com and then check his or her disciplinary record at www.calbar.ca.gov under attorney search. 

3. If #2 doesn't work, try legal aid in the county in which the house is located.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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