Separated Spouse and Mortgage Co-signing

by Karen
(Michigan)

If a parent co-signs a mortgage for his daughter and then becomes responsible for paying that mortgage, is the parent's spouse also liable for the mortgage payments? In this situation the parent and his spouse have not lived together for several years. They are not legally separated, but file their tax returns as Married filing separate.

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Who Pays The Mortgage If There is a Co-Signer?
by: Jeffrey

Hi Karen,

I see you're from my home state of Michigan. I've been living in Florida for almost 4 years now. Got tired of the winters.

Thanks for visiting my website and asking your questions.

In the case of parents who are "non-occupant co-borrowers" on a mortgage, if for some reason the daughter stops paying on the mortgage, the lender can come after both parents if they are still married.

Even though they are not living together, both will still be held responsible if even if only one of them signed the mortgage. Most states, Michigan included have dowry rights. So one mate cannot sell a house without the consent of the other. It also works in the favor of the lender this way.

Now I'm not a lawyer and I'm only making an educated guess, but I'm pretty sure all parties to this transaction can be held accountable by the lender.

The only real way out of this situation is to sell or refinance the home and get the parents (non-occupant co-borrowers) off the mortgage.

I hope this helps.

Regards,

Jeff

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