# Cosigning Loan for a friend.



## brooklynAnn (Jun 29, 2015)

I am posting this here because I am not sure where to post it.

At the end of last year my good friend ask me to cosign on a mortgage for her. I said we would. Now I am having second thoughts.

A bit of back story: J (friend) parents are both dead. Her mum died before her dad by 10 years. The family house was in both of their names. After the mum died the dad remarried was married for less than 5 years. The mum"s name never came off the deed and the dad never changed the deed. My friend J has lived in the house all her life and upon finding a job after college, took over the mortgage payments etc. Nothing was every put in her name. After the father remarried she put all the household bills in her name including house insurance and real estate taxes. There was no mortgage and the mum always said the house would go to her. It's a two family house. MY friend lived on one floor and the parents the next.

Upon the father's dead the step mum ask for her half of the property. The house is about 1.3M. So, my friend asked my husband to co-sign the loan. It's been over 6 months and every month the amount that the stepmum wants goes up from 450 to 550 now 650. My friend's brother signed away his rights to the house because he has no job and can't help. They have run my husband's credit 3x in the pass 6 months. They had issues with the probate court because the step mother lives in another state but that's all clear up now.

I always thought my friend makes good money but it seems like she does not. 

After all this my husband does not want to do it. I explained to my friend that my husband is saying no because this has dragged on too long. She started crying that she would have no where to live and would have to sell the house. So, I told her to sell the house and buy a condo. She cannot afford that (her words). She is divorced with one 22 year old son that just graduated from college and is job hunting. The mortgage will be about 4000 a month. She is receiving rent of about 2700.

She said there is no one else to co-sign for her. Another of our friends who is in the mortgage business told my H that it would be hard for him to get off the mortgage because if she does not have enough income, no one would refinance for her. 

The thing is we are planning to retire in 4 years. We already have the land for our house in Fl. And we want to leave our home for the kids if they decided to stay in the city. My husband is worried that this loan will get in the way of us getting a loan for new home.

And her no good brother moved into the basement apartment and not paying any rent. My H wants nothing to do with him. I thought the loan was for $250 because that what the lady asked for in the beginning. 

I told her this morning that my H does not want to do it anymore and she is begging for us to reconsider because she does not know what to do and don't want to lose the home that her mother worked so hard for.

I know that this will be the end of our friendship if we don't co-sign and that will be awful because I don't have lots of friends. But I have to put my family above everyone and would hate to disappoint my H if this goes sour.

I feel bad about the house and I don't want to put my family in jeopardy. What to do of wise people of TAM? I am in turmoil.


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## MJJEAN (Jun 26, 2015)

No. Just no. She sounds like she cannot afford the entire mortgage payment herself and that's a hard no in my book.


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## brooklynAnn (Jun 29, 2015)

That what the loan specialist who is a friend told us. That she cannot afford the mortgage and if she cannot then don't do it. It's like she is not taking no for an answer.


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## dubsey (Feb 21, 2013)

Um, this is a pretty hard no.

Better advice, would be to see who technically owns the home at this point. She may not need to buy out the new wife at all.


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## Evinrude58 (Jun 16, 2014)

Hell no.

Here's why:

number one, she can't afford the debt. NO DOUBT. your credit history will suffer hugely.

2, and one I didn't think about when I cosigned for my ex fiance's mortgage: That mortgage of your friend's that you cosign on will count against your debt/income ratio and unless you're wealthy--- you won't be able to get credit yourself!

I had trouble getting a freaking signature loan for 10k and my credit score was 801!

I had to get my ex to show them her bank statement for the last 12 months showing the mortgage was being paid by her.

So under no circumstances do you cosign for your friend. And She shouldn't ask it of you. It's not something you ask of a FRIEND. That is business. And you will suffer financially if you do that. So will your HUSBAND.

Just my opinion.


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## Middle of Everything (Feb 19, 2012)

Sucks to lose a friend but HELL NO. 

Push comes to shove and you and hubby are on the hook for a lot of money.

Also if you guys move to FL anyway this friend will be mostly removed from your life anyway.


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## brooklynAnn (Jun 29, 2015)

the house is deeded in her parents. the stepmum is getting half per NYS. Neither of her parents left a will.


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## Rocky Mountain Yeti (Apr 23, 2017)

Middle of Everything said:


> Sucks to lose a friend but HELL NO.


If keeping a friend is based on cosigning for a loan, then that's really not much of a friend in the first place. Any "friend" with such expectations should be easy to cut ties with if push comes to shove. 

NO.


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## dubsey (Feb 21, 2013)

then, at the end of the day, it's time to sell the house, and any hostility she has, should be directed at her parents for being stupid.


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## Evinrude58 (Jun 16, 2014)

Who do you think will give you and your husband a loan when you're on the hook for 1.3 million. Answer: NOBODY

If you cosign for her, plan on never getting a loan again. Seriously
Debt/income ratio.... Ask any banker and they will tell you that you are crazy if you do that.


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## Buddy400 (Aug 30, 2014)

My wife and I won't even co-sign a loan for our kids!


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## Evinrude58 (Jun 16, 2014)

dubsey said:


> then, at the end of the day, it's time to sell the house, and any hostility she has, should be directed at her parents for being stupid.


Exactly, her dad's lazy attitude about taking care of business and not having a will caused this situation. Stepmoms sometimes..... Geez

A "friend" like this?????? C'mon now, how is her having a place to live YOUR problem? She has a job. She can find a place to live.


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## Lostinthought61 (Nov 5, 2013)

tell her friend to get a lawyer the new woman is not entitle to half the house......


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## brooklynAnn (Jun 29, 2015)

Evinrude58 said:


> Hell no.
> 
> Here's why:
> 
> ...


This is something that was explained to us this weekend. I never thought of this. And my H wants a new car this summer.

We are ok off and we have a bit of savings part of which was used to buy the land. And we had promised our daughter to pay off her student loans at the end of her schooling, which will be next year. She is a wonderful child and don't expect this but my H thinks that is his duty to bless his kids with great education. And we have been putting all most of our money into our retirement because we want to enjoy that part of our lives. 

I don't want anything to mess that up for my husband. He works really hard to provide and take care of us. He deserves to spend part of his life doing what he wants and to enjoy his life without worrying about money.


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## anonmd (Oct 23, 2014)

brooklynAnn said:


> the house is deeded in her parents. the stepmum is getting half per NYS. Neither of her parents left a will.


No, no, no <g>. NYS is not SF, there are places she can afford on 1/2 of a $1.3 million property. Not only no - HELL NO.


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## zookeeper (Oct 2, 2012)

No. There is no amount of sob story that makes this a good idea. Never let someone else's drama convince you to make a decision against your own self interest.

No real friend would expect you to do this.


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## As'laDain (Nov 27, 2011)

brooklynAnn said:


> I am posting this here because I am not sure where to post it.
> 
> At the end of last year my good friend ask me to cosign on a mortgage for her. I said we would. Now I am having second thoughts.
> 
> ...


you are in turmoil because you are afraid of the consequences of making the SMART decision. not because you will have done ANYTHING wrong, but because your friend will blame you and your husband for not agreeing to the NEW deal she is proposing. 

with the rising number and the long drawn out ordeal, you and your husband are seeing that what you two were agreeable to at first is not going to happen. you both agreed to cosign a loan under certain conditions. those conditions changed. you did not agree to take on an unlimited amount of risk for her. accepting risk for her is what you would be doing. if you cosign, you make yourself liable if she cannot pay. plus, it will show up as debt on your credit report. your husband is right to worry about it!

you would not be doing anything wrong by refusing to cosign on the mortgage. if you push your husband to do it, or do it for him without his approval, you will likely harm your marriage. 

i wouldn't do it. i have taken many people into my own home and got them back on their feet. last year, i just got done paying all of my brother-in-laws legal fees, and have set things up for him to move out of state and into a career and home with my sister(who i also took in and just got finished setting up). its not like i don't care. its just too much risk for too little reward.


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## Evinrude58 (Jun 16, 2014)

brooklynAnn said:


> This is something that was explained to us this weekend. I never thought of this. And my H wants a new car this summer.
> 
> We are ok off and we have a bit of savings part of which was used to buy the land. And we had promised our daughter to pay off her student loans at the end of her schooling, which will be next year. She is a wonderful child and don't expect this but my H thinks that is his duty to bless his kids with great education. And we have been putting all most of our money into our retirement because we want to enjoy that part of our lives.
> 
> I don't want anything to mess that up for my husband. He works really hard to provide and take care of us. He deserves to spend part of his life doing what he wants and to enjoy his life without worrying about money.


Thankfully, your husband already knows what to do. SAY NO. And all you need to do is express your support for that decision.

Cosigning in your situation would actually have the effect of locking up all your credit the instant your husband signed that document. 

You know what happens with good intentions. Pretty admirable that you and your fellow would consider helping your friend, though. She doesn't sound like she has a lot of empathy for your predicament over the cosigning, though.


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## Middle of Everything (Feb 19, 2012)

Evinrude58 said:


> You know what happens with good intentions. Pretty admirable that you and your fellow would consider helping your friend, though. *She doesn't sound like she has a lot of empathy for your predicament over the cosigning, though.*


Because she is only thinking about herself. Which most people do.

And when the **** hits the fan, she would still be thinking about herself and BrAnn and Hubby would be ****ed. 

As others said, a TRUE friend would never ask such a thing.


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## As'laDain (Nov 27, 2011)

The Farmers Neighbor: "give me all of your seed grain or i wont be your friend anymore!"

Farmer: "well, im really going to miss your company..."


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## uhtred (Jun 22, 2016)

I'm the sort of person who really likes to help people out, but this is not something its reasonable to ask. 

If she needs someone to co-sign a loan, it is because a bank does not believe that she will be able to pay the loan, even with the house as collateral. This is basically asking a friend for money - a LOT of money. She probably doesn't see it this way - she probably honestly believes that she can and will pay, but an outside observer (the bank) doesn't believe she can.

I don't think it is ever reasonable to ask a friend for money - beyond trivial short term things. 

I understand just how desperate things can be, and someone can be in a situation where they see no way out. 


I expect you will lose you friendship over this - but I think you will lose it anyway when she is unable to pay and you are stuck with an enormous cost. 

I'm sorry, this situation sucks.


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## brooklynAnn (Jun 29, 2015)

I put on my big girl panties and called her. I explained what you guys told me and about H not wanting to do it. She is upset that we wait so long to tell her. And not sure what to do and will speak to her lawyer about selling. 

I told her to speak to my other girl who is a mortgage specialist because she said she will work with J and find a solution if there is one.

She wasn't mad, just upset, stressed out and worried. She told me thank you for trying to help because no one else wanted to.:crying:
I wished I told her yesterday. 

Thank you all for giving me the courage and the information. 

I have problems saying no.


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## brooklynAnn (Jun 29, 2015)

It was a short convo. :grin2:


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## brooklynAnn (Jun 29, 2015)

Told my Husband I let her know that we wouldn't cosign. He asked if she was mad and I said no. He told me next time think before I say yes to anything.

I feel so relieved. This thing was bugging me for weeks now. 

Agains thanks for your wisdom.


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## As'laDain (Nov 27, 2011)

brooklynAnn said:


> I put on my big girl panties and called her. I explained what you guys told me and about H not wanting to do it. She is upset that we wait so long to tell her. And not sure what to do and will speak to her lawyer about selling.
> 
> I told her to speak to my other girl who is a mortgage specialist because she said she will work with J and find a solution if there is one.
> 
> ...


God bless you!

this is one of those moments that validates that thing i have been saying for a while about things we are afraid of doing...

"the fear is almost always bigger than the fact"

the consequences you feared were feeling guilty and losing a friend. the _actual_ consequences were feeling like a weight has been lifted off of your chest and seeing your friend experience stress. but you have already been seeing her experiencing stress, so that's no different than before...


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## Evinrude58 (Jun 16, 2014)

ugh, I know that was a hard call to make. BRAVO for getting it done rather than dreading it and procrastinating like I might have done, LOL.

At least your friend sees the reasoning behind your decision, and likely realizes it isn't your fault.


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## Openminded (Feb 21, 2013)

When you said consigning a loan I was thinking it was a small amount of money and even then I was going to advise you not to. Good for your husband -- and you -- for saying no. IMO she shouldn't have asked and put you on the spot in the first place -- let alone earlier begged you to change your mind when you told her what your husband said. Hopefully, she'll figure out the answer on her own as she should have done from the beginning.


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## TeddieG (Sep 9, 2015)

brooklynAnn said:


> This is something that was explained to us this weekend. I never thought of this. And my H wants a new car this summer.
> 
> We are ok off and we have a bit of savings part of which was used to buy the land. And we had promised our daughter to pay off her student loans at the end of her schooling, which will be next year. She is a wonderful child and don't expect this but my H thinks that is his duty to bless his kids with great education. And we have been putting all most of our money into our retirement because we want to enjoy that part of our lives.
> 
> I don't want anything to mess that up for my husband. He works really hard to provide and take care of us. He deserves to spend part of his life doing what he wants and to enjoy his life without worrying about money.


Listen to your gut instincts. Even if you didn't have a plan to retire to Florida or pay off your daughter's school loans, your gut is screaming "OMG no." Your gut doesn't need a reason to tell you no, you just know. The only time I ever got into trouble in my life was when I ignored my instinct telling me no, even if there were a hundred rational reasons why the other way was the best way to go. 

Don't do it. No need to explain, justify, or rationalize to your "friend."


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## TeddieG (Sep 9, 2015)

brooklynAnn said:


> Told my Husband I let her know that we wouldn't cosign. He asked if she was mad and I said no. He told me next time think before I say yes to anything.
> 
> I feel so relieved. This thing was bugging me for weeks now.
> 
> Agains thanks for your wisdom.


I'm with your husband on this one. My boss keeps saying yes to anything with a PhD, not matter how stupid or expensive the idea. I explained to him one day that when I came here almost 20 years ago, my training included as the very first thing, do not EVER answer with a YES. Answer with, I'll investigate, or I'll check in to that, or let me look into it.


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## EleGirl (Dec 3, 2011)

brooklynAnn said:


> That what the loan specialist who is a friend told us. That she cannot afford the mortgage and if she cannot then don't do it. It's like she is not taking no for an answer.


Tell her that you just found out that your credit is not good enough for co-signing. They will check your credit. I've used this excuse before to not hurt the feelings of friends and family who have asked me to co-sign a loan for them. They cannot check my credit so they don't know that the excuse is not true. It's none of their business after all.


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## As'laDain (Nov 27, 2011)

EleGirl said:


> Tell her that you just found out that your credit is not good enough for co-signing. They will check your credit. I've used this excuse before to not hurt the feelings of friends and family who have asked me to co-sign a loan for them. They cannot check my credit so they don't know that the excuse is not true. It's none of their business after all.


i have checked several peoples credit reports in the past... there are services you can pay for that allow you to do so...


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## threelittlestars (Feb 18, 2016)

brooklynAnn said:


> That what the loan specialist who is a friend told us. That she cannot afford the mortgage and if she cannot then don't do it. It's like she is not taking no for an answer.


Well...you have the HARD no. She cant do it without you so... Um get some balls and say NO. no no! :grin2:

She may toss you aside as a friend but she should not have treated you this way or put you in such a position....


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## veganmermaid (Jun 17, 2016)

Middle of Everything said:


> Because she is only thinking about herself. Which most people do.
> 
> 
> 
> ...




I mean, to me it seems a little different than this... it sounds like she asked, brooklynann and hubby said yes, they continued to say yes and subject themselves to credit checks, etc., signaling commitment, and then somebody talked some sense into them this weekend and they’re NOW backing out. Frankly, brooklynann, you and hubby should have done your research BEFORE saying yes. It’s water under the bridge now, but I hope you can have some empathy for your friend, given that she took you at your word 6+ months ago and is now scrambling. Not your fault, no, but certainly you can understand why she’s upset.


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## OnTheFly (Mar 12, 2015)

oh boy, did I ever have a knot in my stomach when I read the OP……so glad it turned out right.

You did the wise thing, Ann, good for you.


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## I shouldnthave (Apr 11, 2018)

Nope. No, no way.

Never lend a friend money, or co-sign for a loan unless you are ready to never see that money, or your friend again.

Money has a great way of ruining friendships.


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## Married but Happy (Aug 13, 2013)

You did the right thing, hard as that is. It would only be a consideration, IMO, if you also were put on the deed and had rights to the equity sufficient to cover your risk, plus a right to force selling the property if you/she could not sustain the payments. That all gets complicated, though, and probably not worth the effort.


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## brooklynAnn (Jun 29, 2015)

veganmermaid said:


> I mean, to me it seems a little different than this... it sounds like she asked, brooklynann and hubby said yes, they continued to say yes and subject themselves to credit checks, etc., signaling commitment, and then somebody talked some sense into them this weekend and they’re NOW backing out. Frankly, brooklynann, you and hubby should have done your research BEFORE saying yes. It’s water under the bridge now, but I hope you can have some empathy for your friend, given that she took you at your word 6+ months ago and is now scrambling. Not your fault, no, but certainly you can understand why she’s upset.


I agree with you that I should have figured out what it would mean to us before saying yes. I do feel bad for saying no and putting her in turmoil. I think if every thing went as planned it would have been signed by now. But the step mother keeps going up with her demands because she thinks the house is worth more. And whats worst is that her no good brother moved into the basement apartment 2 months ago and is not paying rent or utilities. She had promised me that he would have nothing to do with the house. Because he comes with lots of issues. And I don't want to have to deal with him because his kids want their part of inheritance. When the grandfather died with no will. So having the brother there add more risk to the whole situation if something were to happen to her.

Anyway, my other friend who is a mortgage broker will now work with her and help her. But she will need to move into the basement and rent out her floor. If she can get her brother out. Plus, she will put J in contact with an estate lawyer because she thinks that lady might not be entitled to that much. Just half of what the dad's portion was because the house deed was still in her mum's name and its tenant in common not tenant with survivorship. They met up last night and went thru some paper work. 

So, I think this will workout even better for her. At least I hope so.


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## Thor (Oct 31, 2011)

Your friend was screwed by her parents not having wills. Ugh. She isn't really losing the house her mom worked hard to buy. I'm sure her half of the value of the house today is a lot more than the inflation adjusted money her parents paid for the house. But her dad royally screwed up and he is the one whose inaction caused the house not to pass onto their daughter as they had wished it to.

If the house is worth 1.3 million, your friend's half is $650k. That's a lot of money! She could buy a very very nice home here outright for cash and still have money left over. I think this is her opportunity to cash out of the house and move somewhere with a sane cost of living. Those of you living in places like NY have a really distorted view of what real estate values are, and what a sane mortgage or rent is.

I can't think of a creative option for you to help out your friend. Even with a renter in the second unit she cannot afford the mortgage. It doesn't make sense for you to get financially involved in this one because there is no clear endgame for her to pay you off any time soon. Banks are overly generous with mortgages, so if she can't get a bank loan she is a really high risk of default.

The only question I have is why has the valuation changed so much? Shouldn't it be based on her dad's date of death? It shouldn't be going up over time after his death.

I would approach this by telling her what you already have, that the numbers have changed too much since the original discussion. I would also encourage her to look at this as a huge financial gift from her parents which she can use as a springboard to a better quality of life. Would she want to move to Florida? Maybe she could work only part time and call it semi-retirement.


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## brooklynAnn (Jun 29, 2015)

@Thor, I think she never got an estate lawyer, she is using the guy who did her divorce. Because inheritance are based on the value of the house at the time her father died. which would be 800s. But the step mum keeps looking at Zillow and wants more. :grin2: 

I always think that house is holding her back from having a life. Her marriage broke up because the parents were too involved in it. Then, went her mum got sick I was there helping her to get everything together, all she had to do was take the will to be notarized and she never did. She died two weeks later. 

After the mum died I begged her dad to sign over the house to my friend (a few times,she asked me to talk to him) but he said he did not want her exh to come back to the house. I said they are divorce but he said she will take him back. So, dad died with no will and 1.5 year ago exH died of heart attack. 

I told her to buy a condo with her share but I don't think she wants to leave the house. She is too attached to it. 

House value is crazy in Brooklyn these days. You have people knocking at your door every week trying to buy because the inventory is down. And they want to buy up the two family houses and convert them into 5 families by adding two floor and rezoning the basement. 

I do agree with you that our sense of house value is distorted.


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## Evinrude58 (Jun 16, 2014)

veganmermaid said:


> I mean, to me it seems a little different than this... it sounds like she asked, brooklynann and hubby said yes, they continued to say yes and subject themselves to credit checks, etc., signaling commitment, and then somebody talked some sense into them this weekend and they’re NOW backing out. Frankly, brooklynann, you and hubby should have done your research BEFORE saying yes. It’s water under the bridge now, but I hope you can have some empathy for your friend, given that she took you at your word 6+ months ago and is now scrambling. Not your fault, no, but certainly you can understand why she’s upset.


I respectfully disagree. Brooklynann and her husband probably would have cosigned (which would have been a huge mistake) had her friend gotten it done. The friend kept altering the situations and causing deal breakers, which forced BrooklynAnn to have to hold off on cosigning. 

If the "contract" of the yes gets altered, the yes can get altered as well--- morally, that is. Just my opinion.

I truly think that BrooklynAnn has zero reasons to feel guilty here. Maybe sympathy for her friend, but no guilt.


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