I wanted to help my friend (with no US credit history) to buy a property in 2006 so I am on the loan 100% owner, but he is on deed on trust as co-owner since he pays all the payments and one day I want to remove my name from deed of trust so he can own it 100%. After he has got the credit history meanwhile after decrease of real estate it is not possible to refinance the appartment since it has lower value than the mortgage. But I would like still some kind of agreement with him that he will pay the mortage payments even though he will need to leave US due to visa issue. Should I write some special contract to protect myself? Is it possible to do the short sale under my friend's name? I own my own house for which the value went up.

Thank you

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 Tags: legal

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1 vote

Alicia Naiman    August 26, 2009

Although your friend pays the mortgage payments, in the eyes of the lender, you are the only borrower. You will need to have a separate contract between you and your friend if you wish to continue receiving payments to cover the mortgage. If payments to the lender are missed, they will pursue you, not your friend. You would not be able to short sell it under your friend’s name, since you are on the loan.

*This should not be construed as legal advice. I am not an attorney.


Alicia L. Naiman
CA Realtor, CA Real Estate Appraiser
Specializing in Sacramento, Placer and El Dorado counties
http://www.SacramentoRealEstateSearch.com