What happens when your co signer dies?

Question

I know this is an awful question due to the nature of losing a grandparent but I am being pressed to ask this by family members.

I have a mortgage that my grandmother is the co signer of.... what happens?

All she has 2 cd's that she put up for collateral for a note of mine.  The names on the notes for when she dies is her children's names... what happens there?  My mother is afraid my uncles with be upset with me over, even though she did it along time ago and I've never missed a payment.  I am worried they will be mad.

Pojo · Accepted Answer

Unless and until you pay off the loan those CD's will be hung up as the collateral and they can not be redeemed or distributed to the heirs.  Now family or not I suspect they will be very angry when they can not cash in those CD's.  Money and family should never be mixed.

Best you can do is hope the loan balance is low enough to go to the bank and BEG them to release the collateral, in this case the CD's.

Make no mistake the heirs or ones who would get the funds from those CD's are going to be furious so you need to talk to them.

Crazy Horse · Answer

Your family shouldn't get angry with you about this.  If you keep the note the way it is, the company cannot go after your family at all.  You can try getting a new one, since all your payments were on time.  I wouldn't sweat it at this point, but you should consider it.

thecardoctor420 · Answer

if you keep paying your note nobody will ever find out 
if you dont they will try to find her but if she died god rest her soul
they might forgive the note but in these times i doubt that 
you still will mess Your credit up if u dony pay

Brad · Answer

nothing.
if you default the bank can make a claim against her, but not on her estate.

What happens when your co signer dies?

4 Answers