Stepfather Wants me to co-sign his mortgage

[Green]

I would speak to a real estate lawyer before doing anything like this just so you understand the entire situation.

 

I was in a similar situation once and spending a few hundred dolars with a lawyer to do a property search, find out how much everything was worth and left to be paid was worth it.

 

The thing is if your mother dies god for bid what do you think would happen. Does she have a half million dollar life insurance plan with you as the beneficiary?

 

I personaly would not sign it I could see why it would be anoying but your mother will still love you even if you don't sign it and if she doesn't guilt her.

[califnan]

I think they do want to refinance their mortgage, but I'm not positive. I wish she would just divorce him, but that's not going to happen, and I think most people know that it's useless trying to get your parents to do anything.

 

I guess, all I can do is not worry about HER problems, although it's nearly impossible to not get involved. It's frustrating when it's the parent that needs guidance, and not the child. I wish I just had responsible parents. I hate it, because I am paying for my own college education, and hate asking my parents for money, and yet my SF sees no issue with asking a non-blood relative for help.

 

----------------------

 

Yes, I think a refinance or a new loan would be the only way of switching names of ownership.

 

The refinance could be to pay his debts - or to put on the house in China, etc... Either way, you are fortunate, in that the bank probably would not qualify you.

 

In the event of a bankruptcy, or judgement - if the house were in the pot, a recent change of title wouldn't make a difference, unless it were an exchange sale.

[Little Bird]

So, I went to see a financial adviser today about this and she basically told me,

 

A. For me to be the new co-signer they would have to refinance their mortgage. If this is what they are doing, it would be because my SF wants to borrow more money to take care of other debts, spending, etc.

 

B. He only wants to remove his name from the title, and put my name on it without asking for anything else.

 

C. Sometimes elderly parents want to put their children as co-signers in case anything happens to them. This is not the case with my mom. She is middle aged, not dying.

 

She didn't tell me not to do it, but her explanation of what would happen to my credit if I did pointed me in the direction of not doing it.

[Trimmer]

I know you've processed a lot of this already, but I have a few comments:

Well, my mom said she would still be making the mortgage payments, like she has been doing the past year since my step father has been laid off, but that the change would be that on paper his name would be replaced with mine.

 

She doesn't expect me to pay anything, assuming that nothing happens in the future, like her losing her job or something.

What happens when times are good doesn't really matter. You need to take that "assuming nothing happens in the future" to heart. You need to plan for the possibility of things going bad; even if they aren't likely to, they still can. So to be realistic, you should plan your own finances as if you will have to step in at some point. As others have pointed out, this liability (for a lending bank will look at it as a liability you are responsible for) may well severely limit you from doing any financial activities of your own (car, house, etc...)

 

This whole idea of "oh, it won't mean anything, just your name on a paper" is smoke and mirrors. If it doesn't mean anything, why do they need you to do it? If the mortgage payments are all fine and dandy and being taken care of and there's no risk there, then ask them why does he need to have his name off the mortgage?

 

Did he even ever articulate something that he purported to be a good reason for this apparent effort to financially screw you and your mother, other than feeling a little better about his own personal finances going into retirement?

Yeah, I want to amplify that one yet again: I would really like to nail him down as to the particular reason he wants to be off the mortgage, and what the financial implications and/or advantages are. No hand-waving "feels better" junk - what will the real effect be. WHY?

 

Think of it this way. We already know from your post that the mortgage is getting paid anyway, so think this through. The only reason he wouldn't want HIS name on the mortgage, would be to give him freedom from financial entanglement if he decides to ditch your mother, leaving her with the bill for the house, while himself continuing to own part of it.

I agree - this is the only advantage I can see.

 

So, I went to see a financial adviser today about this and she basically told me,

 

A. For me to be the new co-signer they would have to refinance their mortgage. If this is what they are doing, it would be because my SF wants to borrow more money to take care of other debts, spending, etc.

 

B. He only wants to remove his name from the title, and put my name on it without asking for anything else.

I want to make a very important point here: you need to distinguish who is "on the title" (i.e. who owns the equity in the house) from who is "on the mortgage" (i.e. who has promised the bank to pay back the loan.) Almost always, these are the same, and I believe banks want it that way, but be very clear that these are two related, but different, things. And that leads me to wonder just what his plan is... How do they hold title now? Joint tenancy, tenancy in common, etc? Was he proposing to change this as well, to quit claim his share of ownership over to you so that, by title, you would own the house with your mom, at the same time that you would assume co-signer status? Or was he intending to stay on title as joint owner, but get off the mortgage (that might be a hard-sell at the bank...)

 

Now I'll say this: if he and your mom were willing to remove him completely from the title, and have you installed as co-owner on the title, and then you would co-sign the mortgage, yet they would continue to make the payments, that might actually be a good deal, if they have a fair amount of equity in the house - they would essentially be giving you half the equity ("his" half) and half of the future appreciation, in return for co-signing on the mortgage. But unless you already have some financial "means" and you understand real estate deals, and you can withstand some investment risk, and you know what all of this means and it makes sense to you, I would advise against it. Keep your finances clean and separate and go out and start living your life, without these burdens.

 

So bottom line, I agree with the comments above: this all sounds slippery, and I think either he is not being straight about what his real motives are, or else he doesn't really understand what he is doing himself.

 

Stay away.

 

(And I also agree that your mom shouldn't be putting you in this kind of position...)

Edited May 14, 2010 by Trimmer

[SoleMate]

Look, there is no such thing as "cosigner"...

 

you would be a signer, PERIOD. EVERY BIT AS MUCH indebted as if you were actually LIVING in the house you're on the hook for. The lender couldn't care less what stories or promises the stepdad fed you. If you sign this loan, there is a GREAT chance you could end up with your credit RUINED just to pay for his (and you mom's :-( ) poor judgment...

 

This is the kind of mistake that can be biting you 5, 10, 20 or MORE years down the road.

 

DON'T DO IT!!!!!!!!!

[califnan]

----------------------

 

Yes, I think a refinance or a new loan would be the only way of switching names of ownership.

 

The refinance could be to pay his debts - or to put on the house in China, etc... Either way, you are fortunate, in that the bank probably would not qualify you.

 

In the event of a bankruptcy, or judgement - if the house were in the pot, a recent change of title wouldn't make a difference, unless it were an exchange sale.

 

----------------------

 

Yes, For the most part, I think I called it ... Furthermore: if there were any good intentions toward you, by your stepfather - they could have been addressed in a living trust/will.

[PrettyinInk]

First of all, it's not his to say about who signs the mortgage. It's the lenders and they're not likely to let him off the hook.

 

However, if there's a lot of equity in the house and he wants off the hook...sure, sign a mortgage, get a note from him to you for the payments, and have the house put IN YOUR NAME. The minute he stops paying the note to you, you sell the house and the money's yours.

 

No brainer.

 

 

in a market such as we have in the united states right now, it is not that easy, and it is not a no brainer, many people are loosing a lot of money on houses right now.

[PrettyinInk]

So, I went to see a financial adviser today about this and she basically told me,

 

A. For me to be the new co-signer they would have to refinance their mortgage. If this is what they are doing, it would be because my SF wants to borrow more money to take care of other debts, spending, etc.

 

B. He only wants to remove his name from the title, and put my name on it without asking for anything else.

 

C. Sometimes elderly parents want to put their children as co-signers in case anything happens to them. This is not the case with my mom. She is middle aged, not dying.

 

She didn't tell me not to do it, but her explanation of what would happen to my credit if I did pointed me in the direction of not doing it.

 

removing your name from the title doesn't really do anything except take away your rights to the house, so i doubt that is what he wants to do, if your step father was to do this, the only thing that would change is that your mother would not need his permission to sell the house, his name would still be on the mortgage.

 

i'm sorry you have to deal with his, i have a friend who has really immature parents, and she has always felt like the one taking care of them, so i really feel for you, and i know it is difficult to say no, or stay out of the business of someone you love. stay strong!

[turnera]

Your mother should be ashamed of herself for putting you in this position.

 

And you should tell her that. If she's going to treat you like the adult, she should get to hear the verdict like a child.

 

grrr

[Mary3]

With the terrible housing market I am not sure many people have any * equity * at ALL !

 

Now there are those who bought their houses years ago that likely do....but anyone that bought after 2006 especially in the West ( Calif , Nevada , Arizona ) their houses have fallen as much as $ 200,000 ! ( I kid you not )

 

So if dad ( er.. step dad ) has got home equity loans and sucked all the equity out of the property ( along with his massive debt shows he has no financial savvy ) then what do you have there ?

 

True ..the house may have equity but I would worry about YOUR future , buying houses , cars , loans in this VERY shakey economy. Its even hard for alot of college graduates to LAND JOBS right now.

 

Think about YOU.;

 

Tell Step Daddy to take a Hike !

[carhill]

'I talked to my financial adviser and they suggested that you are insane'

 

One possible response

 

As they process this in silence, support that perspective by leaving. Good luck

[Little Bird]

Now I'll say this: if he and your mom were willing to remove him completely from the title, and have you installed as co-owner on the title, and then you would co-sign the mortgage, yet they would continue to make the payments, that might actually be a good deal, if they have a fair amount of equity in the house - they would essentially be giving you half the equity ("his" half) and half of the future appreciation, in return for co-signing on the mortgage. But unless you already have some financial "means" and you understand real estate deals, and you can withstand some investment risk, and you know what all of this means and it makes sense to you, I would advise against it. Keep your finances clean and separate and go out and start living your life, without these burdens.

 

The financial adviser at my bank from what I understand said that me being on the title would be considered by the bank as equal to being a signer for the mortgage, although my mom and SF would not be refinancing the mortgage, but only taking his name off the title.

 

Even if it is a plus for me to own half the equity of the house, I think with his shady finances and spending, it would be best for me not to get involved.

 

The only reason he gave for wanting this change is because he is retiring soon. I don't understand how retirement would affect a mortgage this way, other than that he doesn't want to spend his retirement money on the house.

 

I hope that my mom doesn't let him cop out of this because he was the one who convinced her to buy this huge expensive house in the first place, and now he want's out. They can't even sell it now, so they're stuck with it. Plus, he's spending money on some retirement mansion in China!

 

If he just leaves her when he retires (he plans on spending half of each year in China, anyways), than she has to support herself and my sister who has Downs Syndrome. He's also been laid off for over a year, and when he was working it was only part time, so he's always been a useless load, while she's been supporting him.

 

I don't even want to think about it, because I just get pissed off. I usually have dinner or lunch with my mom once in awhile, but he's always there, and I can't enjoy myself, because I'm just fuming the whole time I'm around him. It's starting to affect my relationship with my mom, because I find I don't want to be around her if he's there. I can't tell her, I can't be around you if he's there.

 

He's been married two times before, which makes me really suspicious, like he's just used women and when he doesn't need them anymore, he leaves them. My mom is younger than him by around 12 years, so she'll be taking care of him when he's senile. The whole thing makes me think of marriage differently, and in a bad way.

 

Also, my mom has mentioned several times to me, that eventually in the future when she sells the house (if they can), she wants to buy a smaller house for her and my youngest sister, and that she wants me to move in with them and have the mortgage under her name and my name. She just assumes that I won't have my own life and family, and that I'll live with her and my sister forever, helping take care of them. I mean, I am the oldest child and my sister has a disability, and I feel guilty, but her assumption that I'll always be there is suffocating. I feel like all my choices in life will be selfish if it involves me living away from my family.

Edited May 18, 2010 by Little Bird

[turnera]

I can't tell her, I can't be around you if he's there.

Why not? She's your mother.

[Atlantico]

Is not clear what your SF wants you to be, from your messages: a co-signer or a co-proprietary of the mortgage

 

In the last case you would be getting half of the equity of a 500k house, overnight, anyone dreams ! But of course your credit situation would be impaired as you would become mortgaged. But I dont believe your SF would give up his share, just like that, looks like he is about to re-finance the house to get more money.

[Angel1111]

This is truly one of the dumbest things I've ever heard of, and I really don't understand why they have decided to involve you in this. Sometimes the things I hear about how parents use their children makes me sick. Right now, your mother and her husband make me sick.

 

So what if he doesn't have a job? So what if he's retiring? The mortgage already exists, the qualifying part is over with. I don't get it. Personally, I think he's up to something and I wouldn't waste my time trying to figure out his grand scheme. Just bow out of this situation altogether and let your mom know once and for all that your answer is no and to stop bringing it up. Somewhere down the road, this monster is going to raise its ugly head and hopefully, your name won't be anywhere to be seen on that document when it does.

 

Your mother is living in LaLa Land and needs to wake up. It's incredibly unreasonable of her to assume that you'll live with her once you're out of college - not to mention that you'll tie yourself to her with a mortgage. This is a HUGE deal. Do not underestimate the power of a house to tie you to a problem for a very long time. I do understand taking care of family but your sister's illness doesn't mean that you shouldn't have a full and happy life. And shame, shame, shame on your mother for burdening you with that. It's horrible what she's implying. You have every right to live carefree and happy. If both your parents die or become disabled, then yes I can see that you will need to have your sister cared for - but this is not the time to be faced with that.

 

And, yes, you actually do have a right to tell your mother that you would prefer to have lunch with her alone - at least sometimes. There's no law that says you have to like her choice of husband. If she had a lick of sense, she'd respect your feelings. And every issue between you and her seem to have to do with that very thing. Sorry, but I'm not overly impressed with your mom.

[Mary3]

Your mom sounds like a doormat ( sorry , I know you love her but this is the truth )

 

She is one and wants you to BE one.

 

Your Step Father is as crooked as the leaning tower of Pisa....

 

If you put your name on that mortgage you are ON that mortgage.

 

That just lets your scummy Step Dad skip free !

 

I bet like MANY posters here that your Step Dad is up to NO GOOD !

 

I am glad you have the vision that your mom does not seem to have about this worthless ( sorry ) but WORTHLESS guy who racks up debt and women.

 

How utterly AS*ININE that he buys a house he cannot afford and wants to USE you !

 

He is not your blood.

[Mary3]

In all likelihood the stepfather and mother are planning to commit mortgage fraud, with the lender for the refinance and the daughter/OP as victims.

 

Something like this--let's say there's X amount of equity in the house. Stepfather and mom do a cash-out refi to get all possible available equity out of the house. In exchange for the refi, and getting all the cash proceeds/equity of the refi, SF agrees to give up his interest in the property (i.e. takes the cash to China, where his other wife and family, live, and more or less vanishes).

 

The selling point to the mom, who might not really be deeply involved in the fraud as the SF, and might be something of a victim herself (although that's highly doubtful), is that then it's the mom and the daughter on the title, and on the new/refi loan. However all the equity has been sucked out of the property, it now has zero equity.

 

The only way I can possibly see that they could swing this is by submitting fraudulent documentation concerning the OP's income/employment and assets in order to persuade the refi lender to do the transaction. Of course Op would have to sign off on the fraudulent docs. but that would be accomplished by shoving a bunch of papers under her nose, and getting her to sign them without reading them, which might not be so hard to do.

 

There is no other reason a transaction like this would even be contemplated. If there is any equity in the property why would SF agree to have his name removed from the title without getting a piece of it?

 

This is a scam, pure and simple. I'm skeptical about the mom since she's a cheater herself, that's how the relationship with SF began, so she obviously is dishonest from square one. If she cheated on OP's dad, she'll cheat OP, natch.

 

Now, the denoument of the scam is when the mom simply decides to stop paying the mortgage, she doesn't care, there's no equity left in the property anyway; she lives in there as long as she can before foreclosure and eviction, then who's holding the bag? That's right OP. You'll be the bagholder.

 

Bottom line, I hate to say it, but your mom is an untrustworthy, lying piece of skanky trash who cheated on your dad.

 

Sorry, but she is what she is. She would cheat you out of your life savings in a heart beat if she could.

 

After all--she cheated you out of your dad, didn't she?

 

 

Oh by the way, you need to get a new financial advisor. Any financial advisor who wouldn't tell you in the strongest terms to run far away from this kind of transaction is worthless to you.

 

Beautifully Spoken.

 

I know you love your mom but like this poster suggested maybe she is in on this in some offhanded way.....or she is just blindsided with love for your SF and does not see it...

[Enema]

You should read the thread before commenting Stealth Echo.

[CrestfallenNoMore]

How can you retire from being laid off? I don't understand this "he wants to retire soon" argument.

 

I hope you're still of a mind not to do this. Listen to your intuition, it's there to serve you.

[threebyfate]

Non-cynical view: It sounds like he wants to retire soon and draw pension benefits of some kind. But what your mother and SF might be concerned about, is that your mother's sole income might be insufficient to refinance the house. Keep in mind that their mortgage might also be up for renewal.

 

Question:

How is it possible that a student has sufficient credit rating and income to pass the bank's risk filters?

 

Risk:

Your SF can then walk away leaving your mother and yourself holding a potential upside-down mortgage with no hit to his own credit rating. I'm assuming upside-down since you were told they can't sell right now.

 

Conclusion:

I'm glad you refused to co-sign. The potential for risk isn't worth the negative sum return. Also concerning is your mother saying that you will share a home with your sister and herself.

 

Looks like everyone is looking to you to make their own lives better. Glad you chose to avoid being trapped for life. Don't bow to this if they keep on nattering. Your mother and SF made choices in life. They can live with their choices.

[Little Bird]

Well, after awkwardly telling my mom that my answer is no, she hasn't brought up the subject again, and my stepfather hasn't said anything, so they seem cool about it. The topic of me eventually living with my mom and co-owning a house with her is something that she still brings up occasionally. When that happens, I basically don't respond to her and just let her talk, as it's something she says is for the future, and I don't want to get into a fight about it if it's not something to consider until way down the road.

 

I don't know if she wants me to live with her and share the mortgage when she's old and senile and is unable to take care of my adult sister who has Down's syndrome, or if she thinks it's more like in a few years, when I graduate from college and have a steady job. I'm okay with helping family, especially when it concerns my sister, but the whole idea of having a mortgage and her assuming that I won't have my own life or family and will live with her from the get go, is what disturbs me. Right now, I can barely figure out what to do with my life, with one year left of college, and the idea of having that much responsibility is kind of anxiety inducing.

[Mary3]

Well, after awkwardly telling my mom that my answer is no, she hasn't brought up the subject again, and my stepfather hasn't said anything, so they seem cool about it. The topic of me eventually living with my mom and co-owning a house with her is something that she still brings up occasionally. When that happens, I basically don't respond to her and just let her talk, as it's something she says is for the future, and I don't want to get into a fight about it if it's not something to consider until way down the road.

 

I don't know if she wants me to live with her and share the mortgage when she's old and senile and is unable to take care of my adult sister who has Down's syndrome, or if she thinks it's more like in a few years, when I graduate from college and have a steady job. I'm okay with helping family, especially when it concerns my sister, but the whole idea of having a mortgage and her assuming that I won't have my own life or family and will live with her from the get go, is what disturbs me. Right now, I can barely figure out what to do with my life, with one year left of college, and the idea of having that much responsibility is kind of anxiety inducing.

 

I think its very NORMAL that you would want to start a life of your own.

 

I understand you care about your sister and your mom.

 

Please take care of yourself and I believe your life will work out the way its intended to.