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Guest

Hello!
When refinancing my loan, I asked my in-laws to act as co-signers. Due to several unfortunate circumstances, I am currently in foreclosure proceedings and am trying to short sell the house. I don't want my failures to affect the in-laws. In case, bankropcy becomes my only option, I would like to remove their names from the loan/title. Is quit claim deed the way to go? Is there anything you can suggest?

elnoralittle · Posted: Sun Nov 01, 2009 5:15 am Post subject:

Unfortunatley, you are unable to protect the inlaws. The point of the co-signer is, if the borrower cannot make the payments, the co-signers are supposed too.
They are on the note of the home, and they cannot be taken off at this point.
The only thing you can do is let them know what is going on so they can try to repair their credit as quickly as possible.

Guest

Thank you, Elnora, for such a quick response. I figured there would be little I can do, but thought I would look around. Luckily, they don't really need a good credit history (old school people, who pay for everything in cash) and they are aware of the situation. Just hate hurting those who attempted to help.

elnoralittle · Posted: Mon Nov 02, 2009 6:17 am Post subject: From Elnora

It's an awful situation to be in.
Chapter 13 will help you stay the foreclosure for about 3-5 years if the bank doesn't seek to fight that.
Your other options are short sale and deed in lieu of foreclosure. These types of transactions, while they will stay on your credit, will have the most impact for about 2 years. Foreclosure will have the most impact on your home buying future for 4 years.

If you have any questions along the way, write in, we can help.

I would also contact the loss mitigation department of your mortgage company. Try to seek protection under the Hamp program, or get a loan modification. Some mortgage companies just want you back on the right track and might be more willing to work with you than deal with another foreclosure.

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Quitclaim deed - removing in-laws from the loan