if the property is sold, the loan must be paid in full. when you sell a property, you must be able to provide clear title to the buyer. if a mortgage exists and it is not paid in full, then clear title cannot pass to the buyer.
as for legality...these things are done all the time, but lenders are not happy. when a loan is generated, borrowers sign a promissory note that stipulates the loan must be paid in full if the property is transferred. most people ignore this, but at their own peril. if a lender is aware of a property transfer, it will, in many cases, "call" the loan in question - that is, require that the loan be paid in full.
as for legality...these things are done all the time, but lenders are not happy. when a loan is generated, borrowers sign a promissory note that stipulates the loan must be paid in full if the property is transferred. most people ignore this, but at their own peril. if a lender is aware of a property transfer, it will, in many cases, "call" the loan in question - that is, require that the loan be paid in full.
unfortunately for the daughter, the loan needs to be paid off. The lender has a vested interest in the property and holds the note to it.
Never, ever, transfer title to a property by deed without transferring the mortgage liability. The result is that you do not own the property, but you still owe the mortgage.
In addition, you will generally trigger a due-on-sale clause in the mortgage which means the loan is accelerated, and the whole amount of the mortgage is due and payable immediately.
The daughter can sell the property, but the mortgage must be paid off in full as part of the transaction.
In addition, you will generally trigger a due-on-sale clause in the mortgage which means the loan is accelerated, and the whole amount of the mortgage is due and payable immediately.
The daughter can sell the property, but the mortgage must be paid off in full as part of the transaction.
