Posted by Anonymous on 5/18/06 9:16pm
Msg #120899

crazy ? and probably an obvious answer

Mr.'s A & B are on title;
Mr. A refinances the property;
A while later Mr. A renigs on his loan. Is Mr. B's credit adversley affected?

Reply by Lee/AR on 5/18/06 10:23pm
Msg #120913

In one word: No. Mr. B is not the borrower. However, that does not mean the property won't be foreclosed on & Mr. B. loses it right along with Mr. A. (Standard not giving legal advice, etc.)

Reply by ReneeK_MI on 5/19/06 5:11am
Msg #120960

I assume that you mean Mr. A defaults on the loan - if so, then in my opinion/experience/understanding/not to be taken as Gospel:

Mr. A and Mr. B are not married, therefore their credit reports would be individual reports, only credit that was jointly obtained would be reported on both.

Mr. A refinances w/o Mr. B as an obligated co-borrower - this mortgage will only be reported on Mr. A's credit, and Mr. B's credit is not involved in any manner. Regardless of his being a title holder, any adverse credit affect would be solely Mr. A's.

That said - in the event of foreclosure, Mr. B would need to step in and ante up, or face the loss of his title interests to the interests of the mortgagee, not to mention the loss of his home. While he's not legally obligated to pay the Note - it doesn't provide any free lunches, and SOMEONE has to pay or the home gets sold.

Reply by sue_pa on 5/19/06 8:00am
Msg #120972

disagree with the others

In the event of a successful foreclosure action, that law suit gets reduced to judgment prior to execution. Judgments show up on your credit report and although I'm not sure how credit scoring works, I'd imagine that a judgment would be a pretty big hit. I don't know how Deed of Trust states work but in my state the foreclosure complaint is seeking 2 end results - a monetary judgment on the Note (Mr. B is not responsible for this) and a possession judgment (the property covers this).

Reply by ReneeK_MI on 5/20/06 5:55am
Msg #121232

Re: disagree with the others

Help me out here, Sue - I don't see the disagreement? Unless you're saying the judgement is going to hit Mr. B's report, but I don't see that you're saying that? Otherwise, it looks like we're all saying the same thing.

Reply by sue_pa on 5/21/06 7:39am
Msg #121310

Re: disagree with the others

Renee, I tend to babble on occasion and sometimes my thoughts don't actually come out. The 'loan' won't show up on Mr. B's report. Mr. A is paying timely and then ultimately those late payments - that monthly tracking won't show up for Mr. B. It won't show up for Mr. B when they do the debt to income ratio. It won't show up as an open account for Mr. B.

But, when the default happens and the lender forecloses, that end resulting judgment is the part that will adversely effect his credit. It will show up as a derrogatory public record (or something of the sort). Like I said, I don't know how they score credit but a judgment for a rather large amount probably weighs a lot heavier than a 30-day late on your Sears bill or a missed doctor bill. Also, if Mr. B lets it ride and does nothing, if he later applies for a mortgage for himself, on the 1003 it asks if you've ever been a party to a law suit, had property foreclosed upon, have a judgment against you ... No matter the circumstances, unless you've got a VERY understanding banker, yes answers to those questions certainly move you down a notch or two. Those little blocks are actually the part of the 1003 the borrowers should carefully review because false answers there could possibly considered fraud. Lenders probably don't care if the ages of their children aren't correct on page 1 but page 3 has 'good' info on it.