What happens in a home foreclosure? 26 Answers as of October 06, 2011

Since he cosigned for her, he is responsible if she cannot pay the mortgage. If the house goes into foreclosure, it will appear on his credit and they could even try and get a judgment against him to pay any deficiency. This is very serious and he should see a lawyer immediately to try and mitigate the damage that it will do to him and his credit.

Since he signed on the loan he is also 100% responsible to pay the loan. It does not matter if he ever had any interest in the home he is on the mortgage so he is the one they will look to if she defaults.

As long as there are no junior mortgages involved your son should be fine and won't owe any money if the home forecloses. However, his credit will be ruined by the foreclosure.

If the property is being foreclosed on, and he is a listed co-signer, then this will be something that is reflected on his credit when she (or he) does not make the mortgage payments. He signed as a co-signer, which essentially means that if she doesn't pay, he will. So, he's on the hook here. If the mortgage is not being paid, it will reflect on his credit and if the property is foreclosed upon, it will reflect on his credit. A bigger issue here is with respect to deficiency judgments-which means if the property is foreclosed on, then there's a possibility that the creditor/ lender may be able to pursue a deficiency judgment against him. Deficiency judgments are prohibited when there is a short sale, if the lender forecloses using non-judicial foreclosure (which is most common) and if the mortgage was purchase money (meaning it was used to acquire the property). If the mortgage he co-signed for falls into one of these categories, then the only real impact will be to his credit. Otherwise, he may be facing credit impacts as well as potential deficiency judgment.

It is a financial disaster for him. It is always a mistake to cosign loans. His credit will be ruined, and it will be on his credit report for 7 years. The lender can sue him, in most states, for a deficiency. He can then face wage and bank account garnishment in both states. Depending on when it happens and how, he also could have adverse tax consequences. He may need to file bankruptcy to prevent a deficiency.

Unfortunately if your son is a co-signor on the home loan and it is being foreclosed, he is liable for the debt. It doesn't matter if he lived in the home or not; or whether he made any payments on the home. If the home is foreclosed, he will have a foreclosure on his credit report. The first mortgage will go away through the foreclosure, however if there is a second mortgage in his name, they can sue him. He should confirm this and if there is second mortgage, he needs to talk to a lawyer.

If the property is foreclosed, it would ruin your son's credit. If there is only one loan, then there should be no problem besides the credit. If there are more than one loan, he could be personally liable for some of the debt.

Because he co-signed on the loan, if there is a deficiency on the note after foreclosure (if the value of the home in the foreclosure sale is less than the amount owed) he will be jointly responsible for that debt and the creditor may decide to collect from him if they cannot collect from the co-signer.

A foreclosure has serious consequences. By cosigning your son has guaranteed the loan. So, in order to get its money back in full, the lender can now sell the house at public auction, sue the borrower and sue your son as guarantor. Typically in these situations, the lender will start by foreclosing on the house (i.e., selling the house at public auction). The amount recovered at the auction will pay off any tax liens, the auctioneer, and the legal fees of the lender before even being applied to interest, penalties, late fees and the underlying principal. If there is any amount due to the lender on any of these balances, the Bank typically has the right under the loan note and guaranty, to sue the borrower (your sons friend) and the guarantor (your son) for the deficiency. The lender will likely sue both of them, and will begin collection against whoever has the most assets. Your son should consult with a bankruptcy attorney immediately to discuss his situation in more detail, before it is too late.

Your son may need to consult a bankruptcy attorney especially if the lady in question file for bankruptycy. He is definitely on the hook. Good luck.

He is a co-debtor so his credit report will show the foreclosure. He agreed to be responsible for payment of the mortgage and he did not pay it. The bank relied on his credit and income to make the loan. He is equally responsible for the payments whether or not he ever lived in the property or previously made any payments.

Unfortunately, he is just a liable for the loan amount as she is. If they foreclose, his credit will receive the same treatment as hers. If there is a deficiency amount after the sale, he will be equally responsible for the amount. If they choose to pursue collection of the amount, the lender can collect from him or her or both. Anticipating your next question: A bankruptcy can eliminate his liability.

He will end up with a foreclosure on his credit report, which will make it almost impossible for him to obtain almost any credit for about 2 years and no house loan for 4 to 5 years at the least. Whether he lived there or made no payments is not relevant. If he signed to be responsible in the event the friend did not, now it is his time or face foreclosure.

He'll be on the hook. Some creditors will start loking to him for payment, others will automatically assume he's not paying, either. He should contact the lender if he wants to live there and pay for it (and should get his name on the title) or he could file bankruptcy and eliminate the hassle.

This will affect his credit and he also could be required to pay any shortfall from the foreclosure.

If the note being foreclosed on is a "purchase money" note, from the original purchase of the house, then the California anti deficiency rule protects the co-signer from liability on any amount the lender does not realize in selling the house. However the co-signer does have personal liability for the debt, so it is likely it will show up on his credit report for 8 years or so.