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mikeaz · Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)

This is a question I seldom see, i.e. what happens to the Primary Borrower if the Non-Occupant Co-borrower short sales or forecloses on their primary residence?

So if the Primary borrower cannot afford the loan on their own but the non-occupant co-borrower helped - and later on, that coborrower short sales or forecloses on their primary residence, does that affect the Primary Borrower somehow where the loan would be taken away after being approved? Thanks...

shane · Posted: Wed Mar 09, 2011 2:31 pm Post subject:

If the primary borrower on the co-signed loan maintains the payments on their home, then they wouldn't have anything to worry about. Meaning the lender for the co-signers primary residence can't come after the home that they co-signed the other mortgage for.

mikeaz · Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)

Shane...thanks so much for the response. Would you know if that would apply if the coborrower has an FHA loan on both mortgages?
So in this case, primary residence = coborrower's primary residence through FHA. But this one goes into defualt. Coborrower on family member's loan (Primary Borrower) is also through FHA. Since coborrower defaulted on FHA primary residence, how may this affect the other FHA loan which lists him as a coborrower and listed on that mortgage?

Thanks again ~ Mike...

jveenstra · Posted: Wed Mar 09, 2011 3:50 pm Post subject: mikeaz

You are fortunate to have Shane answering your question.

He is not often on this site.

He is an FHA expert (as well as expert in all other mortgages also)

I will let Shane answer.

shane · Posted: Wed Mar 09, 2011 4:22 pm Post subject:

I don't believe it would make a difference if the loan that was being foreclosed on was an FHA loan, and the co-signed loan was also an FHA loan.

mikeaz · Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)

Shane...thanks for taking the time to clarify. One last quick question if I may....Is there a difference between "non-occupant coborrower and cosigner". In this case you mentioned "cosigned" loan. My understanding is that coborrowers are listed on the loan and mortage/deed/note. Cosigners are not, and are responsibile for only the loan. Not sure if there would be any impacts in this previously discussed circumstance with coborrower vs. cosigner? Thanks again.... ~Mike...

shane · Posted: Thu Mar 10, 2011 1:32 pm Post subject:

Welcome.

If they are non-occupant co-borrowers which are also on the title of the home, then if there are any tax liens, judgments, or the like they can attach themselves to the home that they are the non-occupant co-borrower on.

However the non-occupant co-borrowers primary residence lender can't foreclose on the home that the person is a non-occupant co-borrower on, they can only foreclose on the home that collateralizes their security instrument.

mikeaz · Joined: 23 Feb 2011 Posts: 6 2.54 Dollars($)

Shane, thank you. You are indeed a wealth of information. Have a good rest of the week and enjoy your weekend. Best Regards ~ Mike...

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what happens to the Primary Borrower if the Co-Borrower Short Sales or Forecloses?

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