Posted on: 10th Oct, 2009 02:12 pm
my sister in law managed to get her husband, my brother about 6 years ago to sign a quit claim deed, giving his half of the property to her. she then went out and got a loan in her name only, because she now owned all the property on her own. there is much more involved i won't go into it, but there was a big family squabble over what happened, and as a result, we forced her hand into quit claiming back to our brother what should have been his share to begin with. my question is this, is this legal and binding since she has a loan on the property, his name not on the loan, would the loan company approve of her quit claiming away property that is in reality theirs, the loan companys ? if they get divorced, or if the loan payments can't be made, what happens to my brother and his half of the property ?? if the bank takes it back, is his half of the property still his ?? i am wondering if the quit claim to him is legal and binding with all the ramifications of the outstanding loan on the property. i can't believe a person can just quit claim property to someone else if it has a loan against. if that is the case, then i could do that with my home, which is far from being paid for, but then i could quit claim my share to my daughters.... is this possible??
Most Notes have a due on sale clause that says the loan is due and payable if the borrower adds or removes somebody from Title. Read the Note and you'll see what it says about this. However, a Lender doesn't track Title changes so they won't know if its been changed unless they investigage, and they don't have any reason to investigage unless mortgage payments are missed.
The Title is the collateral for the Note, and they should agree with each other.
The Title is the collateral for the Note, and they should agree with each other.