Legal Question in Real Estate Law in California

Co-signing the loan agreement does not give you any interest or liability as to the property; it merely means that if the child does not pay the minimum monthly amount due, the lender can legally ask her mother to do so. Co-signing is always risky; if your daughter decides the equity in the property is too negative to continue paying on it, your wife will have to start making the payments to prevent foreclosure. Since it will also increase the debt carried by your wife, her credit rating will go down, no matter what the value of the property is.

You need to distinguish between ownership of property, on the one hand, and liability on a loan secured by real property, on the other. Being a co-signer on a loan makes you contingently liable to the lender. It has nothing at all to do with ownership of the property serving as collateral.

Both of the previous attorneys assume you co-signed on the loan without being on title to the property. That may be the case, but I know of no lenders who would accept that. As far as my experience, every real estate lender requires the borrowers to be on title. If the wife goes on title while married, without any other documentation or relevant circumstances, she takes title as community property, entitling her husbant to a 1/2 interest. How to prevent that or minimize his interest is specific to the transaction and the family finances. So I can't answer that part of your question without a lot more information.

I agree with Mr. McCormick in that institutional lenders request all parties on title to property to execute the deed of trust encumbering the property. But it is not clear from your post whether you are on title, or only cosigned on the loan as a guarantor. If you cosigned on the loan as a guarantor only, then Mr. Whipple's response has merit.

If you also were on title, to facilitate the loan, and executed the deed of trust, you may or may not have created a community property interest, depending on other issues.