How can we stop a co-borrower from forcing a sale?

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How can we stop a co-borrower from forcing a sale?

3 months ago my daughter and her boyfriend purchased a house together; 2 weeks ago he walked out and subsequently closed their joint bank account and removed all the money. Now he wants her to sell the house or buy him out. Here are the basics: (1) he is the co-borrower on the mortgage only to help build his credit; he was not necessary for approval of the loan, (2) he is on the deed of trust; (3) he has made no payments or contributed any monies towards the payments, including down payment, closing costs or any other “upfront” payments (all provable); and (4) he is arguing that he never wanted to buy the house but he signed a POA making her the attorney in fact for the purchase. What are her options? Quit claim, refinance, sue for partition, etc?

Asked on October 24, 2011 under Real Estate Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If your daughter's boyfriend is not on legal title to the house that your daughter bought but is on the loan, he cannot force a sale of the property for the simple fact that he is not the legal owner of the property.

I see problems down the road so long as he is responsible as a signatory on the loan. Potentially it would be a good idea for your daughter to refinance the loan on the home to take him off the loan. She needs to be careful about any prepayment penalty on the loan. If there is, she will need to wait until the time has passed with respect to this possible prepayment penalty before she tries to refinance the property.

Good luck.


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