What happens in a home foreclosure?

His credit will be severely damaged by the late payments and the foreclosure.

Foreclosure will show up on your son's credit report and affect his ability to get home financing for about three years.

As a co-signer, he is 100% responsible for the mortgage note and if it is foreclosed, any deficiency from the sale could result in his liability to pay.

Your son is on the hook for this debt. Lecture: Never cosign for a debt unless you are prepared to pay it. A person who needs a cosigner is a bad credit risk. The foreclosure will appear on his credit report. If there is a deficiency he will be responsible for it.

Since he signed on the loan he is also 100% responsible to pay the loan. It does not matter if he ever had any interest in the home he is on the mortgage so he is the one they will look to if she defaults.

It is a financial disaster for him. It is always a mistake to cosign loans. His credit will be ruined, and it will be on his credit report for 7 years. The lender can sue him, in most states, for a deficiency. He can then face wage and bank account garnishment in both states. Depending on when it happens and how, he also could have adverse tax consequences. He may need to file bankruptcy to prevent a deficiency.

He is a co-debtor so his credit report will show the foreclosure. He agreed to be responsible for payment of the mortgage and he did not pay it. The bank relied on his credit and income to make the loan. He is equally responsible for the payments whether or not he ever lived in the property or previously made any payments.

A foreclosure has serious consequences. By cosigning your son has guaranteed the loan. So, in order to get its money back in full, the lender can now sell the house at public auction, sue the borrower and sue your son as guarantor. Typically in these situations, the lender will start by foreclosing on the house (i.e., selling the house at public auction). The amount recovered at the auction will pay off any tax liens, the auctioneer, and the legal fees of the lender before even being applied to interest, penalties, late fees and the underlying principal. If there is any amount due to the lender on any of these balances, the Bank typically has the right under the loan note and guaranty, to sue the borrower (your sons friend) and the guarantor (your son) for the deficiency. The lender will likely sue both of them, and will begin collection against whoever has the most assets. Your son should consult with a bankruptcy attorney immediately to discuss his situation in more detail, before it is too late.

He'll be on the hook. Some creditors will start loking to him for payment, others will automatically assume he's not paying, either. He should contact the lender if he wants to live there and pay for it (and should get his name on the title) or he could file bankruptcy and eliminate the hassle.

Unfortunately, he is just a liable for the loan amount as she is. If they foreclose, his credit will receive the same treatment as hers. If there is a deficiency amount after the sale, he will be equally responsible for the amount. If they choose to pursue collection of the amount, the lender can collect from him or her or both. Anticipating your next question: A bankruptcy can eliminate his liability.