My name is XXXXX XXXXX I'd be happy to answer your questions today.
There's no reason that the proceeds from the sale can't be distributed via a separate check to each party. However, what would usually happen is that there would be one check with both their names on it. They could go to the bank to cash it together, each take their share, and then do whatever they want with the proceeds. There is no logical or legal reason that she needs to agree to a check in his name only. I'll be honest - from what you've said, it sounds like, if she does that, she'll end up in court over the money. It's better to just split the money in the first place, once any liens on the mobile home are paid. The escrow company theoretically could make payments directly to her student loan, but is not likely to do it if the parties cannot agree - they don't have any legal ability to decide who should get the money, beyond the fact that both names are XXXXX XXXXX account.
Your friend unfortunately cannot force her stepfather to pay off a loan on which she is a signer. There is no law that would allow that. She signed the paperwork and agreed to be a cosigner, and one of the consequences of that is that it's going to show up on her credit report. She can only sue him if they had some agreement that he breached - for example, if he stopped making payments, or if they had agreed that he would refinance in his name only and didn't do it.
Also, the sales agreement is a legal and binding contract with the buyer. If your friend refuses to proceed with the sale, she could be sued for damages
. A dispute with the other owner over how the proceeds of the sale should be split is not a legal basis for repudiating a contract. So, if the sale falls through, the buyer could get a judgment against her (which is also a black mark on her credit, and remains there for several years).
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