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Can a QCD protect my Principal Residence from Banks Because of Foreclosure on Secondary Home?

Posted on: 20th Sep, 2008 02:11 pm
Hi,

I live in Maryland and purhcased a couple of investment homes while the market was doing great. Now, one of my investment homes is in foreclosure status (date is set) and I'm trying to get it out of foreclosure by working with the Bank on a plan. I fear if things don't work out and the Bank forecloses on the property that they will come after my principal home (that is half paid off and half mortgaged... and in good standing).

Questions:

1) Can I quick claim deed my principal house over to my wife or daughter and remove my name off of the deed (i.e., give them property rights) even if I am the one responsible for the mortgage? Will the bank of my principal residence accept that?
2) Will the quick claim deed keep the other bank (with the investment home going into foreclosure) from going after my principal home to attempt to put a lien on it?
3) If I quick claim deed my principal residence to my daughter or wife, will I have to pay any taxes for the transfer in names?
4) What tax implications will my wife or daughter have if the deed is now in their names?

Thank you very much for the feedback and advice!
Hi sycpa,

As far as I know, any kind of transfer of property includes transfer taxes and payment on stamp docs. In my opinion you should not go for any kind of quitclaim at this stage as it will be considered as a fraudulent transfer. However, to be on the right track, you can consult a real estate attorney for this purpose.
Posted on: 22nd Sep, 2008 04:25 am
It depends if your state has a "deficiency" law. In most states, lenders are limited to the secured property only. In that case, they cannot go after your primary residence.

Transferring your primary residence will take the property out of your name, and may delay a creditor. However, they may be able to bring an action for fraudulent transfer.

Consult with a local real estate attorney.
Posted on: 22nd Sep, 2008 07:51 am
My mother in law quick deed her house to us in 1994. Since we did not official purchase the home, are we still consider as first time buyers for the $8000 tax credit to purchase our first house by the Dec. 1, 2009 deadline?
Posted on: 27th May, 2009 06:53 pm
Hi Tasha,

Your are now the owner of the property which your mother has quick deeded to you, you will not be considered as the first time homebuyer and thus, you won't qualify for the tax credit. A query similar to yours has been answered in the given link:
http://www.mortgagefit.com/propertytransfer/about22453.html

Please take a look at it. I hope it'll help you.

Thanks
Posted on: 27th May, 2009 09:58 pm
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