quickclaim deed but house still on credit report

Guest

I have a friend that purchased a house with her fiance. they lived in the house for a year or so. Now they are separated and he gave her a quickclaim deed to sign to remove her from the mortgage. She signed it and thought everything was finished.He still lives in the House.

It has been 2 years and she was thinking of buying a house. When she pulled her credit the house was still showing up.

1) Is there anything she can do to get the house removed from her credit score?
2) Will this being on her report affect her getting a loan for a new house?
3) If he lets the house go into forclosure will this affect her in any way?

Someone told her the only way to get her name off was to have him redo the loan. She does not think he would do that to help her. He is not to nice person.
4) If this is the case how can she force him to redo the loan?
5) If he does not redo the loan do she still have some rights over the property that could help her convince him to redo the loan? She does not want any money or anything just does not want anything to have to do with him.

Guest

Sounds like both are on the mortgage and both are responsible for the mortgage. She was an owner on the deed, however, she is no longer on the deed. Technically, when the quitclaim deed was performed, it triggered the due on sale clause which means if the lender finds out, the loan is due in full and the ex would have to refinance to keep the house.
The lender will probabaly never find out as long as the mortgage is paid on time. They could ask the lender if they would remove her from the mortgage and modify the mortgage. He would have to qualify on his own. Some lenders will do it. Many will not. If loan goes bad, she is still responsible for the mortgage. Noty an easy situation. As long as he is paying, her credit stays OK.

Guest

"Technically, when the quitclaim deed was performed, it triggered the due on sale clause which means if the lender finds out, the loan is due in full and the ex would have to refinance to keep the house." Johnat AFC

So do you think she could use this maybe as some leverage to get him to refinance? She just wants to be done wit hthe whole thing.

gmakerley · Posted: Thu Nov 20, 2008 3:03 pm Post subject:

was there some sort of legal arrangement that provided for her to quit claim her interest in the home to him and for him to be required to refinance the mortgage? did she receive any compensation in return for the quit claim?

i'm not sure you can use an accelaration clause as a bargaining chip. if he wants to refinance, he can and will; if he doesn't, then she's going to have to rely on him to continue to make the payments. remember, he suffers also, if he stops making payments.

i guess it's a good thing they didn't get married, but if they had - prior to splitting up - it would have resolved the whole mess in divorce court.

smithsussane · Posted: Thu Nov 20, 2008 7:24 pm Post subject:

Hi AU grad!

Welcome to forums!

As far as I know, signing a quitclaim deed may have removed her name from the property but not from the mortgage. In order to remove her name from the mortgage she will have to ask him to refinance it. The lenders generally ask for refinance as soon as the ownership changes. In this case, I guess, the lender does not know that the ownership has changed.

You have mentioned due on sale clause. But I think that will come into effect if the ex tries to sell the property. I think your friend should talk to the lender once and request the lender to ask the es to refinance the mortgage. As long as the credit report shows the loan in her name, I don't think she will get another loan for a new house. If the house goes into foreclosure, it will definitely affect her credit badly. It will lowered by around 250 points.

Feel free to ask if you have further queries.

Sussane

Guest

Thank you everyone. I will talk to her tonight and let her know what you all have said. I hope maybe she can get something worked out.

qmakerley, She did not recieve anything for signing it and there was not any legal arrangement.. she just wanted out and wanted to have nothing to do with him. He told her that all he needed was for her to sign the quit claim and that would be it. She signed it and thought she was finished with the whole thing.
It was just signed at a local bank and he took it back to his bank. she never heard anything else.
I think her biggest issue is she cant buy a house b/c the other house is still on her credit even though she has no interest or anything in the house.

It just seems like if someone is tricked into signing something then they should have someway to get thier name off of the mortgage, be it through the courts or just talking to the mortgage company.

gmakerley · Posted: Fri Nov 21, 2008 9:16 am Post subject:

au, it is possible that an unscrupulous loan officer suggested this scheme to your friend's ex; hopefully, it isn't the case. another possibility is that the quit claim deed idea was a "throwaway" line by a loan officer and perhaps the ex and his compadres at the mortgage company/bank didn't have any idea how things actually work. believe me when i say there are still a lot of loan officers/bankers lacking knowledge of their own business.

it would be very wise of her to initiate contact with an attorney who can guide her through this mess, and perhaps reach an amicable solution all the way around (not likely, but worth the effort).

All times are GMT - 7 Hours

Page 1 of 1