New York Law: Lender Must Notify Co-Signer of Borrower Default

Yes. Under New York General Obligations Law § 5-331 and related statutes, a lender must provide the co-signer (guarantor) with:

• Copy of any notice of default sent to the primary borrower.
• Copy of any notice of acceleration (demand for full balance).
• Copy of any foreclosure or legal action filing.

These notices must be sent simultaneously or within a short statutory window. Failure to notify the co-signer can:

• Void the lender's right to pursue the co-signer for deficiency.
• Constitute a defense for the co-signer in collection actions.
• Result in statutory damages.

Practical Advice

Co-signers should ensure the lender has their current address. Monitor credit reports. If borrower misses payments, contact lender immediately to discuss options (forbearance, modification) before default accelerates.