Got a mortgage for someone else and went into foreclosure

Please Help:
My friend got a mortgage in her name for her sister. Her sister missed 8 payments and a foreclosure notice was sent. That is now on her credit report and she can't even get a credit card. Is there anything she can do to fix this? She's only 22 years old.
We live in New Jersey.

[wtd]

You can't get a mortgage "for" someone else. To the mortgage lender, it's your mortgage, secured by your property. What you do with the property, like let your sister live in it, or how you expect to pay that mortgage, like let your sister reimburse you for your mortgage payments, is none of the mortgage lender's problem.

This would be a more accurate post:
My friend got a mortgage in her name, missed 8 payments and a foreclosure notice was sent. That is now on her credit report and she can't even get a credit card.

Once the references to the sister are removed, the question of what to do about the problem of the bad credit report completely disappears.

The sister only becomes relevant in a possible action to recover the 8 missed payments. Not enough info in your post to comment on that.

Ultimately -
It's your friend's mortgage.
8 Payments were missed.
Result = bum credit.
All's right with the world - your friend just doesn't like the way it turned out (and I don't blame her a bit, after the way her sister treated her.)

There are a bunch of things your friend could have done at first to protect herself, as well as along the way to salvage the situation, but now - she's kind of stuck with the results of her own actions and inactions.

Look's like your friend tried to do someone a favor and it went horribly wrong. It's a shame when that happens, but it happens.

wtd

Maybe I should elaborate more. My friend's sister wasn't able to get a mortgage, so her sister got one for the property instead. She doesn't live in that house, and she wasn't responsible for the bills. Her sister never told her that they were having problems until it was too late and the property was going into foreclosure. Is there anything she can do, like put a statement on her credit reports, that can help her prove to other lenders that she is a responsible person and that someone else was supposed to be making the payments? I know how it sounds, and like wtd said, she was just being nice and ended up getting screwed.

[wtd]

Your post was quite clear but maybe I need to elaborate -

There's no much that can be done about the credit report.
Putting in a statement that someone else should having been making payments and didn't won't make it look any better.
Not only is it a poor excuse (someone else was supposed to be responsible for my debt), but it will make her look like she is willing to risk her credit ( which she is trying to obtain from whoever is reading the credit report) on others who are unable to obtain credit on their own (probably because of bad credit).
How would you look at this if you were the prospective creditor?
I.E.: How do I know you won't take the credit card that I just issued to you and give it to someone to whom I won't issue credit and then when the bill comes due you'll tell me that you were not reponsible for the debt because you gave the card to someone else.)
This is nothing against your friend, just some things to think about from a different perspective, I'm sure she has learned much that she didn't wish to from this experience.

True, your friend didn't live in the house, but it was HER mortgage and she WAS reponsible for it.

Your friend had two contracts.
One with the mortgage company in which she received a sum of money, and agreed to repay it in installments over a period of time.
She had a second contract with her sister, in which her sister was to live in the house, pay your friend an amount of money equal to the amount of the mortgage payment to live there. This one was verbal I presume, but shouldn't have been.
The situation is the same as if your friend rented the house out to someone - anyone (it just happened to be her sister).
Your friend defaulted on the first contract, as 8 payments were missed (no matter the reason).
Your friend's sister defaulted on the second contract - thus the claim against the sister.

As a practical matter, the sister was probably supposed to simply eliminate the middle man and pay the mortgage company directly, however, from a contractual point of view, this is not how it is at all.

As I stated in my previous post, there were many things that could have been done at the outset to prevent this, but not much that can be done to ameliorate it. The simplist thing your friend could have done was to make the mortgage payments directly, then collected from the sister, thus protecting her credit, as well as her investment (after all she did own the house), in the case of ths sister falling on hard times (as she ultimately did).
I would assume that all correspondence from the mortgage company was delivered to the house that the sister lived in, hence your friend never saw a late payment notice. I suppose you can see what should have been done to prevent this. Your friend should have provided her own address as the address of record with the mortgage lender.

Once again I sympathize with your friend, but you can see that the list of things that should have been done (and the list could much longer, but making it so won't help anything) is far longer than the list of things that can now be done.

Hope you can find a solution that I may not see -
Good luck,
wtd

[JETX]

wtd: good post! Well done!

[wtd]

Thank you sir.
Think it'll stick the second time?

wtd

If your friend has any proof that her sister agreed to make the mortgage payments, i.e. a signed contract between the two of them, then your friend could file suit against her sister and try to recover those payments that are missed. Unfortunately, wtd is right... It was ultimately her responsibility and she should have kept up with the status of her own mortgage account, one way or antoher.