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stephanielestabrook · Joined: 24 Sep 2009 Posts: 1 1.40 Dollars($)

Ok so my husband got a house when his mom lived with us. She is a co-signer on our house. She has since moved out and I have lost my job. My husband only makes enough to cover the rest of the bills in our house. We have only missed one payment so far but I am nervous as to what the future will hold. I got injured at work and am currently unable to return to work per order of the doc. And while you are thinking workers comp is supposed to pay I have been fighting for 2 months to get approved. What will happen to his credit and what can we do should we not be able to get on our feet to pay? Will our mortgage affect my credit for a future home purchase or will it just his. My name is not on the mortgage. Please help me with any info. What is deed in lieu of foreclosure mean?

adonis · Posted: Thu Sep 24, 2009 10:24 pm Post subject:

Hi stephanielestabrook,

As the mortgage is in your husband's name and your mother-in-law is the cosigner, the default payments would not affect your credit in any way. In case, if the property is foreclosed upon, your credit would be safe. The lender may ask your mother-in-law to pay off the dues as she is the co-signer for the loan. If the property is foreclosed upon, then his credit score would be lowered by 250 points and he would not be able to apply for a loan for the next 2-3 years.

A deed in lieu of foreclosure is a good option to save your property from foreclosure. Under this option, you will have to give away your property to the lender. The lender would sell it off to recover the dues. Due to the market situation, there are chances, that the property would be sold at a lower price. However, you won't be responsible to pay off the deficient amount. But, the credit effect would be same as foreclosure - it would lower your husband's credit score by 250 points and would remain on your credit report for the next 7 years.

sunnyca2009 · Joined: 04 Aug 2009 Posts: 1731 35.55 Dollars($)

If you stop makign payments the bank will send you some notice and will probably foreclose on the house

Best option at this poitn for you is to cll the bank and ask for loan modification. This is desinged for people with fianancial diffculty and your situation suits the same

Also if tat does nto work, you cna ask for short sale or deed in lieu

But sonce you are alreayd late on yoru first payment and if it is more than 30 days it has already affected yoru credit score depndign on who is on the loan ( You, your husband and yoru mom)

if you do short sale you will end up loosing 50 oitns in adition to what you woudl loose for late payment

deed in lieu will take out around 250 - 300 points

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What happens to my credit and my house if I cannot pay for it, and what can I do?