quitclaim completed but previous owner has a line of credit on property

squirtnbinbing · Joined: 14 Dec 2008 Posts: 1 1.33 Dollars($)

my mother in law just signed over a quitclaim deed to my husband, her son, on 11/20/08. Thru internet search on local tax collector website I found that she took out a MORTGAGE FOR USE WITH SECURED REVOLVING CREDIT AGREEMENT. What does that mean to him as being the owner now if she defaults on this line of credit? and will we get a deed in his name?

chris · Joined: 14 Dec 2008 Posts: 3 2.73 Dollars($)

Squirt,

I will preface my comments with a disclaimer that I am not an attorney, but I am a commercial banker with a lot of real estate experience. Also, real estate laws can vary significantly from state to state, so be sure to consult with an attorney familiar with the laws in your state and/or county.

Now regarding the "surprise" mortgage: You will have to do a bit more research. I would suggest that you use a local title company to run a title report. This will tell you what has been recorded on the property. I find that tax collector websites can be difficult to use. Old deeds often show up and it is easy to overlook the recorded releases of old deeds. It could be that the mortgage you found is an old one that has in fact been paid off. If so, you will need to contact the lender to have them re-convey the recorded document.

If the mortgage is currently open and has a balance on it then the lender would have recourse to the property in the event your mother in law defaults. Let's hope that doesn't happen.

Regardless of of this however, your husband should receive a copy of the quitclaim deed. The title search should also confirm that the property is in your son's name.

Chris
www.lenderpromo.com

smithsussane · Posted: Sun Dec 14, 2008 10:28 pm Post subject:

Hi squirtnbinbing!

Welcome to forums!

As your mother-in-law has quitclaimed the property to your husband, now he has to refinance the mortgage in his name. As the ownership of the property has changed, the lenders will ask your husband to refinance the property in his name.

You should definitely get a copy of the quitclaim deed which she has signed. But signing the deed will not validate it. Your mother-in-law needs to notarize and record the deed in the county recorder's office as well.

Feel free to ask if you have further queries.

Sussane

jheard · Posted: Mon Dec 15, 2008 10:11 am Post subject:

This is one reason not to accept a quitclaim deed. You should have taken a Warranty Deed that says you have absolute title. Now you have the property subject to the line of credit, which means if she doesn't pay, they may foreclose on your property.

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