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What happens to a property if it is owned 50-50 by two owners and only one owner is on a defaulted loan agreement?

Oakland, CA |

I am a co-owner of a real estate property. The other co-owner got out a mortgage loan and defaulted, and now the bank wants to foreclose. I am not on the mortgage loan. What can I do?

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Attorney answers 4


You do not have to be obligated on the note to voluntarily pay it. If the property is foreclosed, provided the lien attached to the property before you acquired your interest, you will lose your interest.

If the loan was taken out after you acquired your interest, only the interest of the other co-owner would be lost and you would own the property 50-50 with the new acquiring owner. This circumstance would be uncommon and I urge you to seek the advice and services of an attorney if your question is more than a hypothetical. Good luck.

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As Attorney Daymude indicated, you can voluntarily pay the note current even if you are not on the loan. If the lender proceeds with a foreclosure, and if the loan was obtained before you acquired your interest, you will lose your ownership interest.

It is imperative that you contact a real estate attorney to ascertain your rights and your options.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.


As the other attorneys have indicated, the date of your deed and the date of the mortgage are important facts that are not provided.

There are two possible scenarios.

(1) If you owned the property PRIOR to the date of the mortgage, then the mortgage holder can only foreclose on your co-owner's interest. The mortgage holder can then sue for partition to sell the property.

(2) If the date that you acquired an interest in the propert is AFTER the date of the mortgage, then you took the property subject to the mortgage and the mortgage holder can foreclose your interest.

What you can do is dependent on facts that we do not know. For example, if the property is desirable and has equity, you could seek to have your defaulting co-owner sell his or her interest to you and then refinance to pay off the existing mortgage. However, that would not make sense if you the property is not desirable and if it would saddle you with a mortgage payment you cannot or do not want to handle.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.


I agree with the posts above, and strongly encourage you to consult with a real estate attorney in your area to walk you through your options. A misstep in resolving this situation could end up being very costly.

Best of luck.

The information presented here is general in nature and is not intended, and should not be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author, and Pham Law Group does not represent you as your attorneys until retained by a written retainer agreement signed by both parties.