3 Cosigners on a mortgage. Difficulty: One's crazy

b0bd0d

I gotta question bout cosigners on a mortgage. There's three people;

A: the one on the mortgage
B cosigner
C:cosigner

Person C seems to have gone crazy. Robbing, pillaging, fighting, etc. How to person A and B get person C off any and all documents related to the house, if person C's a cosigner. Refinance the loan without person C? Help.

RUNN1NGMAN

You need a lawyer. It's complicated. Whether that person is crazy or not, C is still a party to the contract. If they're just not a good person and not actually lacking mental capacity to understand the contract, you're most likely going to be told, "Sorry, be more careful about whom you enter contracts with." I have no idea how one goes about dropping a cosigner from a mortgage, but it's probably going to involve several court filings and you may lose the mortgage altogether.

The bank's also not going to be too happy about being party to a contract with a crazy person, because that puts them in a bad situation. From your description however, C doesn't meet the legal definition of being incapable of entering into a contract.

Richard_Dastardly

Would it be possible to buy out Mr. C so he willingly gives up his portion?

Sentry

Richard_Dastardly wrote: »

Would it be possible to buy out Mr. C so he willingly gives up his portion?

He'd have to agree to it, of course.

Sadly, most contracts neglect the all important "no pillaging" clause these days.

Djeet

Whether or not a cosigner has any way to fuck you over depends on the specifics of the transaction. Often a cosigner has no rights to whatever he/she is cosigning for, rather they are responsible for the debt in the event the mortgage underwriter/operator stops receiving payments. Ownership is granted by the deed or title, the bank has a lien on the title until you pay them off, the person who takes out the mortgage loan and the cosigners are people to go after when there's a balance on the note and the bank isn't getting paid .

Is crazy cosigner on the deed/title, is crazy cosigner a resident of the property? If so, you might be fucked and have to get a lawyer. It might be good to dig up the paperwork from the transaction and talk to an attorney anyways just to find out where you and crazy cosigner stand w/r/to who owns the property. Personally I wouldn't cosign to something I didn't partially own.

Dareth Ram

if your legal options are iffy, convincing the cosigner it's time to part ways is probably your only option.

Doc

Richard_Dastardly wrote: »

Would it be possible to buy out Mr. C so he willingly gives up his portion?

Cosigners don't necessarily have a share. Their name is there to contribute credit.

Dman

I guess the real question is why do you want crazy person C not to be listed as a cosigner? My understanding of how cosigning works is that the ONLY involvement C has is that if the mortgage defaults he is one of the persons the bank can go after....how does it help you or the bank to let person C off the hook?

I would think its the other way around, you report C to the police for his "Robbing, pillaging, fighting, etc." and get a restraining order against him and then person C decides "fuck you guys I'm going to try and get out of the contract I signed"...and again the banks are going to ask whats in it for them to let C off the hook...

I am thinking maybe your asking this because person C is living with you and/or is a partial owner of the property. If that is the case I would say A and B should get together to buy C out and hope C will go along with that.

admanb

Unless you're using a different definition of "co-signer" than the usual, there is no reason you should be bothering. Being a co-signer puts extra responsibility on them, not on you.

Sarcastro

I also thought the cosigner for a property was there for backup and establishing credit. If you have the credit already, then the only thing that sucks for .. someone.. is that there is currently no real backup plan.

I don't think that someone is you, fortunately.