Posted on: 31st Dec, 2007 11:08 am
i signed a quit claim deed on my house, but i now realize i am still responsible for the mortgage. at the time, i wrongly believed the quit claim deed included my mortgage. in addition, i also have another house with a mortgage. in the event that the first house with the quit claim deed goes into foreclosure, what are the ramifications towards my second house? can they place a lien on it? do i risk losing both houses - since i now have an 'unsecured' mortgage?
Hi Karen,
Welcome to the forums.
The lender can place a lien on the second home only if you are not able to pay the deficiency, if any, due to the sale price being lower than the loan balance.
However, if the market in your area is not good enough, the lender may find it hard to get a decent sale price thorugh the foreclosure sale thereby requiring you to pay the deficiency. So, yes, there is risk, but if you can make up for the remaining debt, if any, with the help of savings and the like, then I don't think he needs to place the lien.
Take Care
Welcome to the forums.
The lender can place a lien on the second home only if you are not able to pay the deficiency, if any, due to the sale price being lower than the loan balance.
However, if the market in your area is not good enough, the lender may find it hard to get a decent sale price thorugh the foreclosure sale thereby requiring you to pay the deficiency. So, yes, there is risk, but if you can make up for the remaining debt, if any, with the help of savings and the like, then I don't think he needs to place the lien.
Take Care
It depends on the type of foreclosure you are in; for a judical one, there can be lien depending upon whether the lender recovers the debt fully.
Thank you very much for the information. Unfortunately, I doubt that I will have sufficient funds to pay the deficiency in the event of foreclosure on House #1.
IF I had NOT signed the Quit Claim Deed and House #1 went into foreclosure, would the same situation still exist? If the sale following foreclosure was not sufficient to cover the entire mortgage, but the title was still under my name - THEN would they still be able to place a lien on House #2?
I appreciate your help. Thank you.
IF I had NOT signed the Quit Claim Deed and House #1 went into foreclosure, would the same situation still exist? If the sale following foreclosure was not sufficient to cover the entire mortgage, but the title was still under my name - THEN would they still be able to place a lien on House #2?
I appreciate your help. Thank you.
If you can't afford it then you will have to let it go into foreclosure, then if you ever sell your 2nd home, they will collect the proceeds from there. How much is owed on the first home? How did this situation come about, why would you quit claim a mortgaged property, was it a family member?
i have no excuse for signing the quit claim deed other than ignorance and stupidity. no, it was not even a family member. i am embarrassed to even write this.
after trying unsuccessfully for 6 months to sell my home, i refinanced it and took out the majority of the equity (a little over 100k). i used most of the money to buy a second home out of state where i planned to move. i eventually intended to try and sell the house again after that, but the value had dropped so i would end up losing money if i sold it. it was very stressful and i was at the point where i was going to do a deed in lieu of foreclosure - which would damage my credit. so a friend said that if i signed a quit claim deed, they would assume my loan and sell the house when the market recovered. but meanwhile, i wouldn't cause any damage to my credit.
i thought i had nothing to lose by doing this - since i was going to damage my credit anyway.
so far, all payments have been made on my mortgage. but now i realize that i have nothing to protect me if they stop making the payments. instead of a 'secured' mortgage - i now have an 'unsecured' mortgage.
i am now lost as to what to do. i am trying to convince my friend to either 'assume' my loan - or refinance with a new loan - or just sign the house back over to me.
i was just stupid - that's all.
after trying unsuccessfully for 6 months to sell my home, i refinanced it and took out the majority of the equity (a little over 100k). i used most of the money to buy a second home out of state where i planned to move. i eventually intended to try and sell the house again after that, but the value had dropped so i would end up losing money if i sold it. it was very stressful and i was at the point where i was going to do a deed in lieu of foreclosure - which would damage my credit. so a friend said that if i signed a quit claim deed, they would assume my loan and sell the house when the market recovered. but meanwhile, i wouldn't cause any damage to my credit.
i thought i had nothing to lose by doing this - since i was going to damage my credit anyway.
so far, all payments have been made on my mortgage. but now i realize that i have nothing to protect me if they stop making the payments. instead of a 'secured' mortgage - i now have an 'unsecured' mortgage.
i am now lost as to what to do. i am trying to convince my friend to either 'assume' my loan - or refinance with a new loan - or just sign the house back over to me.
i was just stupid - that's all.
Hi Karen,
Quitclaim does not remove your financial obligations as you know. So your friend said that he would assume the mortgage if you quitclaim the property to him. Why have not he did it? Have you let your lender know about the property transfer? The lenders do not always agree for that.
Now you just need to ask your friend to assume the mortgage.
Thanks,
Larry
Quitclaim does not remove your financial obligations as you know. So your friend said that he would assume the mortgage if you quitclaim the property to him. Why have not he did it? Have you let your lender know about the property transfer? The lenders do not always agree for that.
Now you just need to ask your friend to assume the mortgage.
Thanks,
Larry
Well karen, even if you would have not quitclaimed, the consequences of foreclosure would have been the same. But you don't feel stupid about it; suich things do happen; we often make mistakes but once you are aware of it, you won't do it again right? So, cheer up and try to convince your friend. Or else, request him to quitclaim the house to you and give him some cash amount in return.
Let any of us here know what he says, then we might be able to help you further.
Let any of us here know what he says, then we might be able to help you further.
A foreclosure on one home will not effect the other in any way. I would suggest asking the person that you quit claimed the property to refinance into their name only to release you from the obligation.