When a Florida homeowner faces foreclosure and there is a co-signer on the loan, both parties face significant financial exposure -- but in different ways. Co-signers who signed only the promissory note (not the mortgage or deed) have no ownership stake in the property, yet they can still be sued for the full deficiency after a foreclosure sale. Understanding the difference between a co-borrower and a co-signer, and knowing what rights and options each role carries, is essential before the foreclosure advances.
Co-Borrower vs. Co-Signer: Key Differences
| Factor | Co-Borrower | Co-Signer / Guarantor |
|---|---|---|
| Signs the promissory note? | Yes | Yes |
| Signs the mortgage? | Yes | Usually no |
| On the deed / has ownership interest? | Usually yes | No |
| Personal liability for deficiency? | Yes (joint and several) | Yes (joint and several) |
| Named in foreclosure complaint? | Yes | Only if on the note/mortgage |
| Can cure default independently? | Yes | Yes (with subrogation rights) |
Our companion guide on co-borrower rights in Florida foreclosure covers the co-borrower situation in detail. This guide focuses specifically on the co-signer (guarantor) role.
Is a Co-Signer Named in a Florida Foreclosure Lawsuit?
Florida foreclosure law requires the lender to name all parties with an interest in the property or the debt. A co-signer who signed only the note may or may not be named in the foreclosure complaint itself, depending on the lender's strategy. However, a co-signer is always vulnerable to a subsequent deficiency judgment action under Florida Statute 702.06 -- which can be filed as a separate claim up to one year after the certificate of sale.
Even if not named in the foreclosure complaint, the co-signer should take the situation seriously and act proactively to protect themselves.
Co-Signer Deficiency Exposure
A deficiency judgment is the lender's right to collect the difference between the foreclosure sale price and the total debt owed. Florida Statute 702.06 requires the court to use fair market value as the floor when calculating the deficiency -- meaning the lender cannot claim more than the true gap between market value and the outstanding loan balance.
The lender has one year from the certificate of sale to file a deficiency action. After that deadline, the right to collect the deficiency is extinguished. If you are a co-signer facing potential deficiency exposure, consulting a Florida attorney before that one-year deadline is critical.
What Co-Signers Can Do Right Now
1. Contact the Servicer Directly
A co-signer has independent standing to contact the servicer's loss mitigation department and request information about the account status, available workout options, and the current payoff/reinstatement amount. You do not need the primary borrower's permission.
2. Cure the Default
If the primary borrower has defaulted and will not or cannot pay, you can cure the default yourself by paying all past-due amounts and fees. This reinstates the loan and stops the foreclosure. Under equitable subrogation principles, a co-signer who cures the default has a legal claim against the primary borrower to recover amounts paid -- though collecting on that claim may be a practical challenge.
3. Push for a Pre-Foreclosure Sale or Short Sale
Use our equity estimator to understand whether the property has equity. If it does, a pre-foreclosure salecan eliminate both the co-signer's and primary borrower's exposure. If the property is underwater, a short sale can be negotiated with the lender, and the co-signer should negotiate a deficiency waiver as part of the short sale approval letter.
4. Negotiate a Deficiency Waiver
Whether through a short sale, a deed in lieu, or a standalone settlement, a co-signer can negotiate directly with the lender for a written waiver of any deficiency claims. This should be in writing before any sale or transfer occurs -- verbal agreements are unenforceable in Florida.
5. Consult a Bankruptcy Attorney
If the co-signer's personal financial situation is untenable, a Chapter 7 bankruptcy can discharge personal liability on the promissory note, including any deficiency judgment. A Chapter 13 filing can also invoke the co-debtor stay under 11 U.S.C. 1301 to protect the co-signer while the primary borrower works through a repayment plan.
When the Primary Borrower Is Uncooperative
One of the hardest situations for co-signers is when the primary borrower refuses to engage with the servicer, will not agree to a sale, or is simply unreachable. In these cases, the co-signer may need to consult a Florida real estate attorney about their rights to compel action -- including a partition action if the co-signer also has ownership rights -- or to protect themselves through direct negotiation with the lender.
The Florida foreclosure checklist is a useful starting point for understanding every stage of the process and your options at each stage.
About Barrett Henry
Barrett Henry is a Broker Associate at REMAX Collective with 23+ years of real estate experience helping Florida homeowners and co-signers navigate foreclosure. Barrett can help co-signers evaluate whether a pre-foreclosure sale or short sale makes sense for their situation, and can connect them with Florida foreclosure defense attorneys for legal guidance. Barrett serves all 67 Florida counties.
Are you a co-signer on a Florida mortgage facing foreclosure? Contact us today for a free consultation -- no cost, no obligation.
