Cosigner and mortgage

Question: I co-signed for my brother on his home but now he is out of a job and can’t pay the mortgage what are my options?

Answer: The first option would be to try to help him make the mortgage payments until he gets back to work.  As long as the payments remain current, the house is not at risk.  If he has some income, perhaps from unemployment insurance, he may be able to make partial payments, and you top up the remaining amount.

If payments are not made on a mortgage, eventually the bank will foreclose and seize and sell the house.  If there is a shortfall when they sell it, you as co-signer will be responsible for the shortfall if you brother is unable to pay.

If it appears likely that he will be out of work for an extended period of time, and if it appears there will be a shortfall when the house sells, it would be prudent to sell the house now (to get the best price possible; it will be worth less with a “power of sale” sign on it) before the bank takes any further action.

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