     Lisa Smith (Lisa) | Wednesday, April 05, 2000 - 12:00 pm 
During his marriage, my fiance co-signed a car loan for his now ex-wife. Since we are trying to buy a house, the mortgage company ran a credit check. A surprise to us, his ex-wife has been late 24 out of 26 payments and we know that she still hasn't made her payment from last month. Her late payments are the only negative appearing on his credit report, but now we don't qualify for a particular loan. Not getting this loan is costing us alot of money. She still has 3 years to pay on the car and understandably, the loanholders will not release him. Does he have a right to take ownership of the car in order to prevent more late payments affecting his credit score? Can he do anything as a cosigner before she completely defaults on the loan? Please help. |
| Christine Baker (Admin) | Wednesday, April 05, 2000 - 10:02 pm
Good question, does he have the right to take the car? He *should* have the right, but in absence of an agreement, I doubt it.
I think all he can do is make the payments, which is obviously NOT good. Maybe he could get a court order?
What was agreed upon in the divorce papers? Maybe things look better if it states that she is to make those payments.
I'd ask a lawyer. |
| kristy welsh - creditinfocenter.com (Kristy) | Thursday, April 06, 2000 - 06:43 am
Actually, if he's still on title, he has the right to the car. I've had reader successfully put pressure on their fellow co-signer by grabbing the car and catching up on the payments. In one case, this at least got the other part to agree to the sale of the vechicle. In another, since the other party was carless, they coughed up at least some of the money owed. |
| kristy welsh - creditinfocenter.com (Kristy) | Thursday, April 06, 2000 - 06:45 am
Christine, on a side note, someone has been posting nasty stuff about you on my site (all of which I've deleted). You can contact me privately if you'd like more details. |
| Lisa Smith (Lisa) | Thursday, April 06, 2000 - 11:13 am
Does co-signing for a loan give the co-signer title to the car? I didn't think co-signing was the same as joint ownership, or is it? |
| Christine Baker (Admin) | Thursday, April 06, 2000 - 01:12 pm
They *should* be both on title. Do you have access to the documents signed at the time? |
| kristy welsh - creditinfocenter.com (Kristy) | Thursday, April 06, 2000 - 02:21 pm
No, co-signing doesn't mean you are automatically on title. It's fairly common to have only the "primary" signor be on title, and leave the co-signor off. It's completely the decision of the person(s) getting the loan as to who is on title. However, of course, if you are getting a loan, you don't get to decide if the lender gets on title, they are automatically put in first position.
Examples of where the co-signor elects not to be on title? A brother co-signing for his sister, mother co-signing a car loan for her son, etc.
Of course, it's my own personal opinion that co-signing for a car and not being put on title is crazy, but it happens all the time. |
| Christine Baker (Admin) | Thursday, April 06, 2000 - 05:26 pm
When you cosign without being on title, your liability is limited to the amount owed. At least you can't get sued as one of the registered owners for who knows what. I know a lot of people who are really paranoid about getting sued.
But since they were married, I can't see why the husband wouldn't have been on title. |
| kristy welsh - creditinfocenter.com (Kristy) | Friday, April 07, 2000 - 06:02 am
Yes, I agree that most likely he was on title. Just pointing out that it isn't required. |
| Christine Baker (Admin) | Friday, April 07, 2000 - 11:15 am
I wonder if there's some kind of boiler plate agreement that could be used by cosigners who DON'T want to be on title?
Something to the effect that they have the right to take the car and/or take legal action if payments aren't made on time and holding the borrower responsible for any damages to the cosigner's credit.
Also, I don't understand why lenders fail to INFORM the cosigner of late payments, yet they report to the CRAs.
It seems to me that they would legally HAVE to inform the cosigner, yet they never do. I would think that the CRAs would have to remove derogatory info as they don't bill/notify the cosigner. |
| Kristi Feathers (Kfeath) | Friday, April 07, 2000 - 03:20 pm
Usually, We see people who don't mind co-signing but do NOT want to be on the title. Reasons vary but usually it is a parent who does not mind co-signing the loan but does not want the liability of someone else driving a car with their name on title for accidents and insurance purposes. We always placed both signers of the loan on title and then told the client that they could remove the other person after the loan was funded. Our point was that we really did not care who was on the physical title because we had the resp. parties on the loan. As for notifying the co-signer, we set it up in the system to send the first past due notice to both parties but was informed by counsel that it was not required. He said it was the co-signers resp. to check on the loan periodically and make sure all is cool. I however, always removed lates for co-signers when they asked, if I felt they did not have adequate notice of the delinquency. Our Terms & Disclosures stated that it was not mandatory to notify co-signer, but we did anyway. Common curt. I think! |
