Full Video Transcript
Many co-signers are worried about how foreclosure might affect them. The fact is, foreclosure is just as damaging to the co-signer as it is to the primary debtor. When you co-sign a loan, you agree to be responsible for it if the primary debtor fails to pay. If the payments are not made, the creditor can not only report it on your credit, but can also seek repayment from you in the states which allow further collection. If you’ve co-signed a loan and the person who you co-signed for can no longer make the payments, you should try to sell the property to pay off as much of the loan as possible. Often though, the problem is that the co-signer is unaware that the primary borrower stopped making payments until foreclosure has already begun. If you’ve cosigned a loan and the person you co-signed for can’t make the payments anymore, speak to a real estate professional or an attorney as soon as possible to determine what options are available to sell the house or otherwise take action to minimize the impact on your credit.
