Legal Question in Real Estate Law in California

If she defaults, you would be liable on the note. I would be very careful what you disclose to the lender, as I am noticing increasing cases of lenders suing borrowers for loan fraud.

The sassy answer would be "What part of 'bad credit' don't you understand?" Go through the scenario yourself, when she is several months behind, foreclosure is pending, and the lender decides to ask you to make good. How do you deal with the lender? With your sister?

LawGuru Answers is littered with whining emails from co-signers who were forced to make good. Sis already broke her promises to repay the banks and credit card companies who loaned her money in the past. You're next.

You risk loss of your money invested, and your credit ruined when she defaults on the loan.

Unless you are capable of paying and prepared to pay the loan when she doesn't, you will ruin your credit and have a foreclosure on your record. The comment of "what part of 'bad credit' don't you understand" was spot on.