Legal Question in Real Estate Law in California

Re: property

No.

Re: property

Attorneys Nelson and Whipple are correct. I can say with virtual certainty that the lender is not going to let you off the hook. Your options would be having your neice refinance and take you off - not likely if she cannot afford this payment; a sale of the home - again, I assume if she is not making the payments, there may not be equity; or paying the loan off. Unfortunately, co-signing is rarely a good idea. Do as Attorney Whipple suggested - pay for an hour or two of an attorney's time to review your situation and see if you have personal liability for a deficiency after a foreclosure, if it comes to that.

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Re: property

If you loaned John Doe $250,000 for thirty years, and a few years later he came to you and said "please take my name off this promissory note," would't you say "Are you kidding?!"

No way is the lender going to take you off the mortgage!

You could, of course, pay it off. That would be a way to get your name off the mortgage. However, you can no longer pay it off by refinancing, because the property isn't yours anymore. I don't really recommend doing this, of course. Among other things, the house isn't really your niece's any more; it belongs to her bankruptcy estate, a different animal.

On limited information, it is impossible to comment on your personal financial risk from the likely sale of the property and default on the loan, but there is a good chance you are immune from personal liability for a deficiency if or when the property is sold by the bankruptcy trustee or the trustee of the deed of trust.

As I have said in what I think was my prior response to the same problem, stated differently, you should consider local legal representation to evaluate whether you have personal liability and whether you have any remedy in the bankruptcy proceeding for what looks like an improvident gift. You should have kept ownership and let the young lady live there for $1 a month rather than give it to her. Get a lawyer now!