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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 100946
Experience:  Lawyer
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My daughter and her husband bought a house and I co-signed

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My daughter and her husband bought a house and I co-signed for the mortgage for them. They have separated and they made an agreement that my son-in-law would live in the house and make the mortgage payments and my daughter has moved to Vernon. He has missed the last 2 payments. What are my options? I would be willing to take over the mortgage but only if he moved out. He has lost his job and would not qualify to take over the mortgage. Can my daughter and I sign our portion back to the bank? Can we sell it with him living in it? I am at a loss as to what to do.
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Is your name on title?

Do you want to buy him out?

Would he agree to this?

Is there enough equity to cover the full mortgage?
Customer: replied 4 years ago.

Yes my name, my daughters name and my son-in-law's name is XXXXX XXXXX

They owe more than they would get if they sold it, but it would probably cover most of the mortgage so buying him out is not really an option, I don't think although I am not really sure how that would work. They owe aprox. $140,000. They could probably only get about $120,000.00. So would we have to pay him $40,000.00? I realize that we would have to have it appraised etc. He's desparate for money so he may agree to that.

I am not quite sure how you are calculating this.

Are you saying that you are willing to take over the mortgage and the property?

If they owe more than it's worth why would you be paying him anything?
Customer: replied 4 years ago.

Yes, that doesn't make sense. Yes, my husband and I would take over the mortgage and the property and rent it out, but his name is XXXXX XXXXX and he is living there, so how would we get him out? Could he sign his portion over to us and remove his name from the title? What if he doesn't want to do that?

He really has two choices as he has no money. He can get out of the house and also out of the debt by agreeing to sign over the title to you.

Or he can let the mortgage go into default and lose the house anyway and be sued for the deficiency along with both of you.

He is luck if you are willing to let him go for free. He most assuredly should not be paid a cent. In fact he should pay you for 1/3 of the deficiency and get out.

Do you see what I mean?
Customer: replied 4 years ago.

Yes, I do see what you mean. Is there some legal way that we can force him to do that?

You can seek an order for the sale of the house.

Then you can also ask for a right of first refusal to buy it.

I wonder if one strongly worded letter from a lawyer may scare him into giving in.
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