Can someone sue the cosigner of my mortgage if I don't have money?

[ramooi]

What is the name of your state (only U.S. law)? CA

How can the cosigner on my mortgage be protected financially if something happens on the property and I am sued? For instance, a kid runs on my front yard, trips over a hose and breaks his leg. Or if my dog bites someone and I am sued? If I don't have much money, they will go after the cosigner, right? Is there anyway the cosigner can be 100% protected? Is there any type of insurance that covers this?

This is hypothetical and I am trying to find the answer for my friend who has offered to cosign for my mortgage. Before he proceeds, he wants to make sure that people can't go after him and his assets if someone tries to sue me and they find out that I don't have enough money to satisfy their greed.

 

[FlyingRon]

If he's a part owner (on the deed) he can be held liable for sure. Just being obligated to the mortgage doesn't incur him liability with anybody other than the lender.

Of course, the biggest trouble he's in is if you don't make your payments. He would be responsible for doing so. Further his credit will also get dinged for any late or missing payments that accrue along the way. Cosigning isn't a character reference, it's signing on to be 100% responsible for the debt.

 

[ramooi]

He knows exactly what type of liability he has in regards to the loan. He is just worried if someone tries to go after him if they see we don't have much. I wasn't aware that his name could appear on the loan but not the deed. Are you sure about that? I guess that it something I need to look into. Thanks.

 

[HomeGuru]

He knows exactly what type of liability he has in regards to the loan. He is just worried if someone tries to go after him if they see we don't have much. I wasn't aware that his name could appear on the loan but not the deed. Are you sure about that? I guess that it something I need to look into. Thanks.

**A: why would he want to be on the loan and not the deed anyway?
That's crazy.

 

[ecmst12]

Of course if you have proper homeowners insurance in place, neither of you will ever have to worry about being sued.

 

[ramooi]

So if the only assets I have are my down payment of 150k, but my friend has 6 million dollars in assets. Do I need to get a home owners insurance with a liability of 6 million or more, or does it not work that way? How can he be fully protected from law suits? Just from the home owners insurance?

 

[HomeGuru]

Of course if you have proper homeowners insurance in place, neither of you will ever have to worry about being sued.

**A: just having insurance is no cover all protection from lawsuits. There could be a lawsuit for an action not covered by insurance.

 

[ShyCat]

Look into umbrella liability insurance.