Posted on: 22nd Mar, 2011 04:23 pm
my friend and her husband needed my help about 3 years ago. they quit claim deed their house to me and i got the loan in my name. they did this because they got into an arm loan and didn't want to lose their home. they told me it was only going to be for about 6 months. it has now been 3 years. they have always lived in the home and pay the mortgage and taxes every month on time.
the kind of loan they set me up with is also an arm loan which will increase the monthly payment from $1800 to $3600 per month.
i tried to help my friends, but the situation has ruined the friendship.
the wife contacted me by email last week and asked if i could meet her husband somewhere to sign some forms and to get them notarized. i asked her to send me the forms so i can review them.
one of the forms is a "quit claim deed" for the sum of $1.00 and the other document is called "notice of lis pendens" on this same form it says an action for "complaint to adjudicate mortgage contract & note.
if i do this i will still be responsible for the loan. is there anything i can do to get this house and loan out of my name and back into theirs without being penalized by the irs. the loan is for $570,000 and the home is now worth $200,000.
i read on one of your forums about "novation" could this apply to this situation?
the kind of loan they set me up with is also an arm loan which will increase the monthly payment from $1800 to $3600 per month.
i tried to help my friends, but the situation has ruined the friendship.
the wife contacted me by email last week and asked if i could meet her husband somewhere to sign some forms and to get them notarized. i asked her to send me the forms so i can review them.
one of the forms is a "quit claim deed" for the sum of $1.00 and the other document is called "notice of lis pendens" on this same form it says an action for "complaint to adjudicate mortgage contract & note.
if i do this i will still be responsible for the loan. is there anything i can do to get this house and loan out of my name and back into theirs without being penalized by the irs. the loan is for $570,000 and the home is now worth $200,000.
i read on one of your forums about "novation" could this apply to this situation?
welcome dominique,
if you sign the quitclaim deed, you will be transferring the property to your friends. however, it will not transfer the mortgage unless your friends refinance the loan or go for novation. however, these options will remain open to them only if they have equity in the property.
if you sign the quitclaim deed, you will be transferring the property to your friends. however, it will not transfer the mortgage unless your friends refinance the loan or go for novation. however, these options will remain open to them only if they have equity in the property.
Since the house is upside down with no equity, the Lender will not refinance or do a Novacation?
Hi Dominique,
Welcome to Mortgage fit,
If you sign the $1 quitclaim deed to your friend,you will not have any control over the property at the same time you are liable to pay the mortgage.Thus it will worsen your condition from the present status......So never ever do this mistake to sign this $1 doc....
Now what you can ask your friend and his wife is to refinance the mortgage (if they do not qualify then they should search some more partner so that they can qualify) and if they are ready to refinance then only you should sign the quitclaim deed....
As far as novation is concerned,I have never heard that it requires certain amount of equity....if all the parties are agree to the changes novation can be accomplished....main consideration is your friend should qualify for refinance....(may be along with his wife and some more partners) .....
Feel free to ask any further query if you have...........
DIPA
Welcome to Mortgage fit,
If you sign the $1 quitclaim deed to your friend,you will not have any control over the property at the same time you are liable to pay the mortgage.Thus it will worsen your condition from the present status......So never ever do this mistake to sign this $1 doc....
Now what you can ask your friend and his wife is to refinance the mortgage (if they do not qualify then they should search some more partner so that they can qualify) and if they are ready to refinance then only you should sign the quitclaim deed....
As far as novation is concerned,I have never heard that it requires certain amount of equity....if all the parties are agree to the changes novation can be accomplished....main consideration is your friend should qualify for refinance....(may be along with his wife and some more partners) .....
Feel free to ask any further query if you have...........
DIPA