Good afternoon Howard,
I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. I'll preface my remarks by saying I am fully against the idea of anyone co-signing for someone else who is not at a minimum a family member by blood or marriage---and then to do so only if you can afford the monetary loss.
With nearly 30 years of legal practice under my belt and countless conversations with folks seeking bankruptcy protection because of a loan that they co-signed on a decade earlier, and is bing sued on---I have to agree with you, that even considering this action borders on, as you suggested, foolishness.
As a co-signor, you have absolutely no interest in the transaction or the property. you are merely acting as a guarantor---as a bank---ready to step forward and pay out of your own pocket, if the loan payments are not paid. In all candor, co-signing for your own child is bad enough---but to do so for the child of someone with whom you have no familial relationship, is simply a risk that most folks are not willing to take.
In this case, if she wants cash, then consider giving it to her as a gift, ---that is about the long and short of the risk you are taking by co-signing.
As a co-signor, the lender can let her keep the property if she defaults and just come after you. The fact that she has equity in the property today means little in terms of protecting you years from npw. If she defaults, both of you will be sued. And with people who need a co-signor to begin with---when it comes time to pay the judgment it is the co-signor who is usually able to pay, and gets hit the hardest.
You gain no lien right as a co-signor. Your only remedy would be to sue her for breach of contract---presuming that you can show that she agreed with you, that as consideration for you co-signing, that she promises to male all the payments.
Your remedy is to sue someone who probably would turn out to be a judgment proof defendant, as they couldn't pay the mortgage in the first place---much less a large money judgment, and a person who can avoid the loss entirely by simply filing bankruptcy.
In a word----don't do it, unless you can afford to take the entire loss yourself. And if you can, you might just as well make the loan yourself---because at least you could take a promissory note.
If you must agree to co-sign for the sake of your relationship with mom---then demand to be on the title as well, so at least you can compel the sale through court if she defaults and places the property at risk of foreclosure and you are risk of a money judgment.
I wish you the best in 2013.
I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.
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