Is a co-signer of a first mortgage responsible for a subsequent second that was taken out?
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Is a co-signer of a first mortgage responsible for a subsequent second that was taken out?
In my divorce I signed off on the deed to my ex-wife. Well in these tough economic times she has lost her home and business. Now the home is going through foreclosure and this effecting me since I am still on the loan. What I am trying to figure out is, if I retain the home back from my wife to salvage my credit, will I be responsible for the 2nd mortgage she took out in her own name? I have received information that “yes” I will be responsible and “no” I wont be responsible. I just don’t want to get myself into something that could make it worse.
Asked on October 21, 2011 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you only signed as a co-signer on the loan secured by the first mortgage (or trust deed) on your former wife's property and she took out later a second loan secured by the property that you did not sign for, you are only responsible as a co-signer on the first loan and have no responsibility legally to keep the second loan current.
If you take title to the home from your former wife, you will then be responsible to pay the second trust deed that she took out alone because the transfer of title of the home to you will have occurred after the second loan (which was recorded on the property) happened.
I recommend that you speak with a real estate attorney to assist you concerning this difficult situation.
Good luck.
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