Does a quick claim deed transferring ownership need approval from the mortgage holding bank to be legal?

The answer to your question is multi-layered and is most likely controlled by the terms of your loan documents and Deed of Trust.  While it is not illegal for an owner/mortgagor to quitclaim property out of their name, many loans and deeds of trust contain acceleration clauses or "due-on-sale" clauses which provide that upon the owner transferring any interest in the Subject Property that the entire loan balance shall be paid in full.  These clauses are regulated by Federal Law.  Nonetheless the Lender may have the right upon any sale or transfer of interest to demand payment in full on the loan. Of course the right and desire to accelerate a loan are different things.  In practice, many lenders do not monitor the ownership status of secured property unless and until there is some reason for the lender to verify the ownership status of the Subject Property.  Put more simply, many lenders simply seek to make sure that the loan remains in good standing and that payments are made timely. Finally, although you will often see the term "quick claim" erroneously used for a deed of disclaimer, the correct term is actually a "Quitclaim Deed".