what happenes to the cosigner if the loan goes into default ?
2007-01-20 11:57:28 · 6 answers · asked by P. Dykes 1 in Business & Finance ➔ Renting & Real Estate
They will get sued, harassed, etc. by debt collectors. Their credit rating will go into the toilet. They will never speak to you again.
2007-01-20 12:01:23 · answer #1 · answered by Lisa A 7 · 1⤊ 0⤋
Something to note: most companies will not let the cosigner know that the note is delinquent. By the time the cosigner is notified, the note is usually 60 or 90 days late or worse. This lateness is reported to the credit repositories for both the primary borrower and cosigner! Or even worse, the primary borrower will file bankruptcy, so the cosigner will now have a loan that is marked, "discharged in bankruptcy." And the discharge is just for the primary borrower. The cosigner will still be on the hook for the repayment.
Keep this in mind: if someone needs a cosigner, it is because the credit grantor has determined the person is unable to pay back the note himself. So you are cosigning a note for a deadbeat. In other words, you're just asking for trouble.
Note: Barbara below indicates that there is no such thing as a cosigner when it comes to a mortgage. That is correct. In a mortgage transaction, though, you can have a "non-occupant co-borrower." This person would share in primary responsibility for the mortgage, but the primary borrower would still be the point of contact for the mortgage company. As Barbara says, though, it is always a bad idea.
2007-01-20 15:50:40 · answer #2 · answered by CJKatl 4 · 0⤊ 0⤋
Are you talking about a mortgage? There is no such thing as a cosigner. You are equally responsible. This will appear on the "cosigner's" credit report but they do have the right to bring the loan up to date. True, they may not be notified if there is no current address on the mortgage note for them.
This is bad business, no matter how much you love them...to sign on a loan with someone....
Good Luck!
2007-01-20 23:40:52 · answer #3 · answered by Barbara 5 · 0⤊ 0⤋
The lender goes after the cosigner for the money!
Cosigning a loan is serious...
2007-01-20 12:01:18 · answer #4 · answered by Take Responsibility 2 · 0⤊ 0⤋
The co-signer is also liable for the full amount. That is the purpose of a co-signer and that is why the lender will make a loan to someone who they would not otherwise deal with. The co-signer is stating that they will step in and make good on the loan.
2007-01-21 06:44:07 · answer #5 · answered by Anonymous · 0⤊ 0⤋
The co-signer is in deep do-do.The lender comes after them.Not good.
2007-01-20 12:01:28 · answer #6 · answered by (A) 7 · 0⤊ 0⤋