I Cosigned on a Home and Now the Other Party has Abandoned it

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July 27th, 2006

This is a classic example of a trainwreck of a financial situation, and the best way to get out of it. I found this story floating around the internet, and I think the lessons from it are valuable enough to post here.

If any part of this sordid tale describes you, then please seek help immediately, and begin to make moves to get yourself out of the situation.

A young man (we’ll call him ‘Sam’) lived with his mother and two brothers in a small home in rural Wisconsin. In 1998, Sam’s mother had the opportunity to purchase the home that they had rented and, because she was living on social security, asked Sam to cosign the loan for $32,000 with her.

One year later, Sam moved to Chicago and started a new life, eventually he got married and had two children. His relationship with his mother soured and they lost touch. In the summer of 2004 Sam got the news that his mother had fallen behind on mortgage payments. The payments were around $250 each month, and she was 3 months behind.

Sam had built excellent credit for himself and decided he would look into refinancing the home to lower the payments and put the house in his name. He asked an appraiser to evaluate the house.

A few days later Sam received a call from the appraiser that he had been to the house: it was abandoned, the grass was uncut (and approx. 3 feet high) and the house was infested with 30 or more cats. The waste from the cats was producing a smell outside the house. When the appraiser walked in and saw dead cats and feces everywhere, he called the local sherriff, fearing a health hazard.

The sherriff called the fire department and humane society, who extracted the cats and put down those that were too sick to be cared for, leaving the house full of cat urine and feces.

Needless to say, the appraiser thought the house was only worth the land under it, and the county was now on the hunt to find Sam and fine him for the violations.

What could Sam do?

Stay Tuned for Part II…

Entry Filed under: Finance Concepts
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