Forgotten Your Password?

Need to Register?

Question Icon

If I do a quit claim deed, and the other property owner defaults on the loan, am I still liable?

by marianne351 from Yale, Illinois. Jul 26th 2016 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,471 contributions

Yes, you would be.. Understand that there are 2 important documents when it comes to real property.. the first is the deed.. this is the document that says who has ownership interest in the property.. If you sign a quit claim deed, you are removing yourself and relinquishing any ownership rights you may have.. the 2nd is the Deed of Trust.. this is the security instrument that says "Who is responsible/liable to make the payments".. Regarding the deed of trust, you cannot be removed unless the lender agrees to modify the document (don't even ask the lender, they will never agree to this).. the only way to be removed, where you are no longer liable for the loan, is to pay it off.. either by having the other party refinance it, sell the property, or just use cash funds and pay it off, but that's the only way you will be removed from the loan. If you quit/claim your rights away, and the other party defaults, you would still be liable and the loan would still show on your credit report.. so even if they don't default, but make a bunch of late payments, it will still reflect on YOUR credit report.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Jul 26th 2016
1
0
Lorne Harvey (lorneharvey)
#80 ranked lender in Washington - 428 contributions

If you signed the promissory note, then yes it will affect you and hit your credit report as derogatory.

Jul 26th 2016
0
0
Scott Fix (ScottFix)
#1352 ranked lender in California - 184 contributions

Both William and Lorne are correct. Signing a quit claim deed should not be used in the transfer of a piece of property. When you sell a property, it is always best to be fully relieved of any responsibility legal, financial or otherwise. No short cuts should be taken. All the best, Scott.

Jul 26th 2016
0
0
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,811 contributions

A quit claim deed only removes you as a legal owner of the property. It DOES NOT remove you from the mortgage loan.

Jul 27th 2016
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,232 contributions

Yes, as long as your name is on the mortgage.

Jul 27th 2016
0
0
Subscribe to our news feed.