What happens if a co-tenant takes out a home equity loan or refinances inherited property without your approval?

Disclaimer: This is general information only and not legal advice. Laws change and every situation is different. Consult a licensed Idaho attorney for advice about your specific case.

Detailed answer — how Idaho law treats a co-tenant’s loan or refinance

When more than one person owns real estate together (for example, heirs who inherit property as tenants in common), each co-owner holds an undivided interest in the whole property. Under Idaho property law (see Idaho Code Title 55 — Property), ownership can be structured in different ways and those structures affect what a single owner can legally do with the property. See Idaho Code Title 55 for statutory provisions about real property: https://legislature.idaho.gov/statutesrules/idstat/title55/.

Can one co-tenant get a mortgage or refinance without the others?

Generally, a co-tenant can attempt to mortgage or refinance their own undivided interest in the property without the other owners’ consent. Practically, most lenders will require all owners’ signatures to secure a mortgage on the entire property because:

a mortgage signed by only one co-owner typically creates a lien only on that co-owner’s undivided interest (not on the other owners’ shares); and
a lender that takes a mortgage on a single co-owner’s interest faces risk: if the borrower defaults, foreclosure will affect only that co-owner’s interest and the lender’s recovery may be limited.

Because of this risk, many lenders insist that all title owners sign the loan documents. But if a lender nonetheless records a mortgage signed by only one co-tenant, the recorded mortgage becomes public record and may complicate title.

What happens if the loan/mortgage is recorded?

If the mortgage is properly signed and recorded, it creates a public lien against whatever interest the signer lawfully had.
If the lender then forecloses on that mortgage, the foreclosure sale typically extinguishes the defaulting co-owner’s interest — and a purchaser at the foreclosure sale receives whatever interest was sold. That purchaser could then seek to partition the property or force a sale of the entire property to realize value.
Other co-owners generally keep their undivided interests, but foreclosure and subsequent resale can reduce or eliminate the total ownership position and can force a sale of the property to satisfy the mortgage.

Can you challenge a mortgage taken without your approval?

Yes. You may have grounds to challenge or quiet title against a mortgage or foreclosure if:

the mortgage documents were forged or fraudulently procured;
a co-owner lacked authority to encumber the property because title had not yet passed to them or probate was still open;
the lender had actual knowledge of competing ownership interests and failed to take required steps (in rare circumstances); or
the loan documents contain defects (e.g., invalid signatures, missing notarization where required).

But if the mortgage was validly executed by the owner of the interest and properly recorded, courts may allow foreclosure and the lender may have priority to recover from the encumbered interest.

Special note about inherited property and probate

If the property is still in probate or the decedent’s estate holds title, generally no individual heir can validly encumber the property until title vests in the heirs or a personal representative with proper authority acts for the estate. The details depend on how title was held and whether probate is completed. If heirs already hold title (for example, after probate or by operation of law), a co-tenant may be able to encumber only their interest.

Common outcomes and consequences

If the co-tenant’s mortgage is defective (forgery, misrepresentation), a court may set aside the lien and possibly void a foreclosure.
If the mortgage is valid and foreclosed, proceeds pay the mortgage holder first. Other co-owners may lose value even though they did not sign the loan.
A purchaser of a foreclosed interest can become a co-owner and may seek partition or sale of the whole property.
You may be able to buy out the co-tenant’s interest or force a partition sale to split proceeds among owners.

Practical steps to take right away

If you discover a co-tenant obtained a loan or refinance without your approval, act quickly:

Search public records at the county recorder’s office (or request the deed/mortgage records online) to confirm whether a mortgage or deed of trust is recorded.
Obtain a complete title report or hire a title company to check encumbrances, liens, and chain of title.
Contact the lender in writing. Ask what signature they relied on, who closed the loan, and whether the lender has a copy of your signature or any document showing your consent.
Preserve documents and communications. If you suspect fraud, note dates and secure copies of IDs, closing papers, and the recorded mortgage.
Consider filing a lis pendens or asking a court for a temporary injunction if a foreclosure sale is imminent. This can sometimes stop a sale while the dispute is resolved.
Consult a local Idaho real property attorney promptly — particularly if foreclosure is scheduled or you suspect forgery or fraud.

Possible legal claims and remedies in Idaho

Depending on the facts, you (or all co-owners together) might pursue:

Quiet title or declaratory relief to remove an improper lien;
An action to set aside a fraudulent deed or forged signature;
A partition action to divide or sell the property under court supervision (partition procedures and remedies are found in Idaho court practice and property law — see Idaho Code Title 55: https://legislature.idaho.gov/statutesrules/idstat/title55/);
Equitable relief such as an injunction to stop foreclosure while disputes are resolved.

Hypothetical examples (to illustrate outcomes)

Example 1 — Single-owner mortgage on one owner’s interest:

Anna and Ben inherit a house as tenants in common, 50–50. Ben signs a loan document alone and a mortgage is recorded that nominally secures his interest. If Ben later defaults, a foreclosure sale may eliminate Ben’s 50% share. Anna keeps her 50% but may face a new co-owner or a forced sale of the whole property.

Example 2 — Loan procured by fraud:

Claire finds a mortgage recorded using her forged signature. She gathers evidence and asks a court to cancel the mortgage and punish the fraudster. If she proves forgery, the court can void the lien and restore the title position.

When to hire an Idaho attorney

You should speak with an Idaho real property attorney right away if:

a mortgage or refinance is recorded and you did not sign or consent;
you suspect fraud, forgery, or a false power of attorney;
a foreclosure sale is scheduled and you want to preserve your rights; or
you need to force a partition or negotiate a buyout.

Helpful hints

Check county recorder records first. A recorded mortgage will show the lender and recording date.
Order a title report to see all liens, judgments, and encumbrances. Title insurance can help for future sales.
Document your ownership: keep the deed, probate paperwork, and any agreement between co-owners accessible.
If foreclosure is imminent, don’t wait — seek an attorney who can file emergency relief.
Talk to the lender — sometimes lenders will pause foreclosure and work out a solution if mistakes are discovered.
Consider mediation or negotiation between co-owners to avoid costly litigation; courts often prefer settlement where possible.
Understand costs: partition suits and quiet title actions cost money and take time; weigh litigation costs against the property’s value.

For statutory background about Idaho property law and recorded instruments, see Idaho Code Title 55 — Property: https://legislature.idaho.gov/statutesrules/idstat/title55/.

Again, this is informational only. To protect your rights and pursue the best course of action for your situation, consult a licensed Idaho attorney who handles real estate, probate, and quiet title/foreclosure matters.