If so, you may want to check in with the person you co-signed for just to make sure every thing’s okay. In the event they’re not able to meet their mortgage payments, you certainly don’t want the "foreclosure man" to show up at your door. The quote below is about a foreclosure in Kirkland where someone co-signed for a friend and the foreclosure man is knocking, as reported by Erik Lacitis of the Seattle Times:
"I just thought I was doing a friend a favor by co-signing," she said. "And then he was going to refinance and get my name off the loan. I can’t afford for this to happen."
No one ever expects to go into foreclosure and much like the person above, intentions are to refinance the co-signer off the mortgage. However when things go wrong and someone is not able to make the payments, the co-signer is on the hook. Unfortunately, the co-signer may not have the same lead time as the borrower in dealing with a foreclosure situation as many who are dealing with this type of situation are living in denial.
Nearly five months can elapse while the various legal steps are taken, and right up until the morning of the auction, the foreclosure can be stopped if an arrangement is made with the lender. Only about 20 percent to 30 percent of foreclosed homes in the Puget Sound area actually are sold at auction, based on statistics from the counties.
Foreclosures are on the rise in the Puget Sound area so if you have done a friend or family member a huge favor by co-signing on a mortgage, you may want to give them a friendly call to see how they’re doing.
Hat Tip to Marlow Harris of 360Digest.