Q: If my mom co-signed on a mortgage for her granddaughter and she passes, could the mortgage company get her house?
My mom did a quit claim deed for her own house for me and my other two sisters but she has now signed for her granddaughter to get a house and she is co-signor. What can I do? I have Power of Attorney. Is there anyway I can get her off the granddaughters mortgage? Will we lose the house if she dies? She doesn't think that she is responsible for the mortgage loan. She doesn't understand that if the granddaughter doesn't pay the payment, she has to. She doesn't understand what she signed up for. What can I do?
A: If she signed the Note, then she is jointly and severally liable for the loan, and you cannot remove her contractual obligation. Her dying is not a Default on the Note, but nonpayment and other requirements are. If the Note goes in Default the Lender will probably sue Granddaughter and the Mother or her Estate. If she dies, Probate is not a good option. The Lender would probably foreclose on the encumbered real property, and then they may or may not sue upon the Note Deficiency , if there is one. The Foreclosure process will not require Notice to you, even if Mother dies.
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