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pandead · Jan 16, 2011, 09:24 AM

Hello,
My friend's parents are asking me to sign a loan for their house. They filed for bankruptcy before and they won't be able to keep their house if I don't. I read up a little bit and it's a tough decision as I don't have 150k in case they can't pay for it (they say they will.)

I don't know what to do, I really want to help but I just have a bad feeling about all this. Any advice?
Important note : I currently don't own a bank account.

Fr_Chuck · Jan 16, 2011, 09:32 AM

Run away, I would not have signed for my own kids.

You have no business signing for the parents of a friend,
If your friend and their parents have that bad credit, and they can't work out a deal with the bank, sorry , let them lose the house.

Or why not you buy the house, and rent it to them with an option to buy,

But under no reason, sign for them.

ballengerb1 · Jan 16, 2011, 09:47 AM

Sounds like they clearly should not be home owners to begin with. Previous bankruptcy, previous mortgage and needing a co-signer all spell disaster. I agree with Chuck, don't sign. Tell us what's with the current mortgage.

pandead · Jan 16, 2011, 10:10 AM

They said the house will be sold to the highest bidder next month (I don't know much about all this to be honest, but all I read online says it's a huge deal.)

I have an average salary and under no circumstance I can afford a mortgage. So basically I would own the house until they pay it off. I think I will say no but I wanted to make sure I was making the right decision, since it will make me feel horribly guilty to tell them and my friend will be disappointed...

excon · Jan 16, 2011, 10:21 AM

Originally Posted by pandead

So basically I would own the house until they pay it off. I think I will say no but I wanted to make sure I was making the right decision, since it will make me feel horribly guilty to tell them and my friend will be disappointed...

Hello pan:

If they DON'T pay, which should be expected given their history, it'll be YOU who puts them out... And, after hearing how guilty you feel when somebody ELSE puts them on the street, you're certainly not going to put them out.

THAT'S why you shouldn't do this. You can't support TWO family's.

excon

ballengerb1 · Jan 16, 2011, 10:25 AM

Sounds like they have defaulted on their original mortgage so they would likely do the same again. What is your friend, their kid, doing to help. This is not something for you to get involved with at all.

smearcase · Jan 16, 2011, 11:31 AM

My first impression was to say "Run like the wind" but Chuck covered that aspect.
If you still feel some obligation to do it, at least talk to a good attorney first and do what he/she tells you.

Fr_Chuck · Feb 13, 2011, 06:22 PM

If you just sign a loan, no you will not "own" the house, the loan and the deed are two different things.

Next again, if you have enough money and can get a loan yourself, let it go to auction and buy the house yourself, cheap, then you rent it to them or let them buy it from you on a contract. Then you own the home,

But either way you will have to make the payments if they don't, and your credit will be ruined also if you can't pay and they don't

I hate to see people lose their homes, but if they can't afford it now, how are they going to afford it when you sign for a loan