Who gets impacted during a foreclosure? Loan vs Dead

[Miranda M.]

If a house goes to foreclosure, who gets hit? Everyone on the loan or everyone on the dead? My little sister is separated from her husband. They got a home with a VA 0% down loan. Now, the mortgage is being neglected. She is not on the loan (stay-at-home mom) but is on the dead. Should she be concerned?

[Tom Gimer]

The foreclosure should show as a judgment against all owners of record (the defendants in a foreclosure action)... so yes, it could affect credit. 

But that's not the entire answer. Lenders often do not consider a foreclosure against a non-borrower in underwriting a new home loan. So while a foreclosure is typically a bar to a foreclosed borrower obtaining a loan for X years, that may not be true for the non-borrower.