If there is a balance on a credit account, why would the lender be willing to remove one of the borrowers from responsibility?

I'd like to buy a home soon, and I don't want to wait long enough to save up a proper down payment.

My though twas the IRS would look at the owner from a legal standpoint which would be me as title would be in my name but again the land contract would be in place giving them vested equity well thats not the proper term, proper term eludes me right now, but you know what I mean...thx Steve!

The principle balance is currently about $56,000.2) Took a job transfer early 2003 and subsequently got divorced.

Brian,In your listing agreement you signed it should say acceptable forms of communication that are selected e-mail,written,fax,certified mail,etc.If e-mail wasn't selected then contractually that is not given proper notice for a price change.Did she confirm BACK to you when you sent the e-mail about the price drop??

Is there anything specific I need to look out for to make sure the problem is taken care of properly i.e damage to the structure etc.

Not necessarily for the actual default but in the future, if you don't properly disclose that default at every turn, you have committed fraud.

I also said I would give her a balloon payment of the balance, $12,152.37 in 10 years.

Most of these appear to have been very poorly executed.The available space after creating proper wall heights yields about an 800 SF studio unit.

As others pointed out, the credit partner would probably see lower credit scores with the increase in debt, and cash reserves would be required with each additional properly.