If you are on title but not on the loan, will your credit be impacted if a notice of default is filed?

Asked by Rochellerowan, Los Angeles, CA Sat Mar 27, 2010

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Christina Hayes’ answer
Christina Ha…, Mortgage Broker Or Lender, Morristown, TN
Wed May 15, 2013
A notice of default is just that a notice. But to answer your question NO.. You have legal rights to the property without being financially responsible.

Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit Repair
Ex-Mortgage Broker of more than 10 years
0 votes
Ramin Lavi, , Los Angeles, CA
Mon Mar 29, 2010
Hello, a seller recently had the same question as you and the answer was NO. The credit will only be damaged by the person which holds the note; read the note carefully to make certain you are not on it. A title company can provide you with this answer in five minutes. If you do have a 2nd lien however and you are married to the noteholder, if the home goes into foreclosure the 2nd lien may tack a defeciency judgment in the State of California against the noteholder and spouse. Very rare however. Good luck!
0 votes
Van Agakanian, Agent, Tarzana, CA
Sun Mar 28, 2010
The answer depends... and it depends whether or not documents such as the note, deed of trust and the document that put you on title are all in lender's possession and your name comes up. In my opinion, you should read entirely the answers that Shel-lee Davis and Deborah Bremner gave you. Their point of view is well taken. Seek professional legal advice!
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Sun Mar 28, 2010
There is some good advice below. Just want to add an additional word of caution and a way to verify if you are "not on the loan". Pull a credit report on yourself. Check to see if this loan appears anywhere on YOUR credit report. If you co-signed in any way, then this might come through on your credit. Remember, by the time there is a Notice of Default filed, there have been a number of missed payments. See if they appear on your credit report. If you see no sign on your credit report, then you are probably okay. However, to really be able to sleep at night, take a copy of the note and deed of trust, along with the document that placed you on title to an attorney and have them verify that you are not obligated under the debt. That is the best way to know your liability on this issue. If you need a referral to a real estate attorney in LA, let me know. Dare to Dream.

Shel-lee Davis, CDPE
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
0 votes
Gerard Dunn, Agent, Chevy Chase, MD
Sun Mar 28, 2010
It will NOT impact your credit.

Be aware though - if the lender forecloses and want to file a deficiency judgement against the borrower - there is a chance that sometime in the future you may be brought into a suit.

Chances are slim - but it is possible.
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Sat Mar 27, 2010
This is the perfect question for your tax attorney or accountant. Ultimately, the lender reports as they choose, based on the documents they have filed and the agreements you make with them. I would highly recommend getting outside counsel on this issue, as your credit is at stake.
Deborah Bremner, SFR, CRS, CSP
REALTOR, 00588885
Certified Short Sale Professional
Certified Home Retention Specialist
(D) 818.564.6591
Blogging at: http://TheBremnerGroup.com/blog
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Mar 27, 2010
If it is not reported to the bureaus then probably not, it all depends on credit reports. However you are still held with financial obligations for taxes and etc.

Lynn911 Dallas Realtor, Loan Officer, Credit Repair Consultant
The Michael Group - Dallas Business Journal Top Ranked Realtors
Web Reference:  http://www.lynn911.com
0 votes
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