QUESTION
Will a quit claim deed release me from the mortgage note?
Asked on Dec 05th, 2014 on Bankruptcy - New Jersey
More details to this question:
My ex-husband is claiming bankruptcy to stop our home from foreclosure. The bank is requiring that I sign a quit claim deed before they will grant him a loan modification. I do not want to sign a QCD if it doesn't. He was ordered to sell the property but never did.
9 ANSWERS
Signing a quit claim deed does not release you from liability. You would need an independent document signed by the mortgage company releasing you from liability.
Answered on Dec 09th, 2014 at 2:44 AM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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No. Simply executing and filing a quitclaim deed will not release you of liability if you are liable. However, if a bank is requiring such a quitclaim deed and you don't provide it, the bank will foreclose and your liability will go from being theoretical to real as the bank will either collect actively from you or forgive the debt, which will cause you to incur debt forgiveness tax debt (unless you can find an exception). Note, importantly, that you may not be liable for any deficiency on payment of the mortgage against your home if that property was your principal residence and the loan or loans were the loans used to purchase the home originally (that is, they were the original loans to buy your principal residence and have not been refinanced and they were not a true credit line).
Answered on Dec 09th, 2014 at 2:39 AM
Unless you have a written contract saying that by signing a quit claim deed you are released from liability on the mortgage, you have nothing. With real estate, a verbal agreement isn't worth the paper it is written on!
Answered on Dec 08th, 2014 at 11:33 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Signing the Quit-Claim deed by itself does not release you from the obligation to pay the mortgage. But if your husband's loan modification will permit him to be the sole signer, and if the old note is cancelled, then you would be free from the obligation. But don't count on it. Why should the bank let you off the hook when they already have you on it? And when your husband is filing a bankruptcy petition. You'll have to get more involved in the process and see what you can do in talks with the bank to get released from the debt, if possible. Good Luck.
Answered on Dec 08th, 2014 at 10:38 AM
You really need to discuss this with an attorney. You want the bank to release you from the note, not just take your name off the property. Often the former spouse will find that their name was removed from the property but are still obligated for the debt. Signing a QCD does not in and of itself release you from the underlying debt.
Answered on Dec 08th, 2014 at 10:04 AM
Probate Attorney serving Friendswood, TX
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Law Office of Melissa A. Botting
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A quit claim deed only surrenders any interest you have in the property. The mortgage company wants that to ensure that you will bring an action under community property spousal interest or any other interest. It does not remove you from a note. However, a modification is a new note and you may not be on the new note. I would insist on a document signed by an officer of the bank releasing you or a copy of a new note that does not include you before turning over a quit claim deed.
Answered on Dec 08th, 2014 at 10:00 AM
Real Estate Attorney serving Florence, KY
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Linda S. Novakov & Associates, PLLC
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No, a quit-claim Deed only transfers any interest you have in the real property to the recipient of the Deed. If you were a signer on the original Note, then you remain liable for the debt. If he is attempting a modification, then you should request that the lender provide you a release from personal liability. This document from the lender will be the "release" you are looking for. If you never signed the original mortgage note, then you have no obligation to pay.
Answered on Dec 08th, 2014 at 9:36 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If you're liable on the mortgage note, a quit claim deed won't release you from liability. If you're not liable on the note, the bank needs you to sign the quit claim deed to release your spousal rights in the property.
Answered on Dec 08th, 2014 at 9:34 AM
General Law Attorney serving Cherry Hill, NJ
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Mark S. Cherry, Attorney at Law, PC
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The quitclaim deed will remove your ownership but will NOT release you from the Mortgage Note. Your divorce documents should have an indemnification and hold harmless clause to protect you.
Answered on Dec 08th, 2014 at 9:33 AM