Q: Mortgage - Acknowledgement of Contribution - is he fully responsible now?
A few years ago my boyfriend’s parents were struggling financially and ended up modifying their mortgage loan (details unknown).
In this process, they asked my boyfriend to sign an acknowledgement of contribution stating that he lives there, is their son, and has been “contributing ____$ funds to assist the borrowers in making their mortgage payment for a period of ___2___ months.” It also says “I will continue to assist the borrowers in making their monthly payments for the foreseeable future”. He gave his DOB, SSN, and signed. Where he signed, the clause reads “I do not claim any interest in the above-referenced property nor am I legally obligated under the original Note and subsequent Loan Modification agreement with the above-referenced borrower.”
The full mortgage has appeared on his credit report ever since as if he is fully liable and paying this mortgage, including their late payments. Is this a mistake? Or is he responsible? What exactly took place here?
A: Acknowledging a contribution for the purpose of a loan modification does not create personal liability on the existing note. The lender does sometimes ask for authorization to run a credit report of a contributor, and if he was living there the address should show as a residence. But since he is not liable (assuming some other contrary fact does not present), the payments/non-payments should not run on his own credit report.
Peter J. Weinman agrees with this answer
He very well may be responsible because he signed a written promise to pay. This situation resulted from sloppy legal work and conflicting written agreements.
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