Legal Question in Real Estate Law in California
My brother (living in Ft.Lauderdale,FL.) and I are presently in escrow ("short sale" for the past
5 months!) for a condo purchase (located in Palm Springs, CA.) and expected to FINALLY close
by 2/11/11. We are "Joint Tenants" in this business arrangment and I have been told, by the loan officer, that if my brother "quick claims" after closing in order to release all liability on his behalf, he will still be responsible for payment of the mortgage in the event I am no longer able to pay it.
I can not iunderstand how, if he were to relinquish his part in full and be taken off the title, he would have any responsibility, whatsoever, in the obligation to remain liable for payment of the mortgage.
This makes absolutely no sense to me and I am hoping you are able to resolve this dispute.
By the way, he is merely offering his "credit worthiness" in order t obtain this FHA loan for me.
I would truly appreciate any advice you may have toi offer.
Thank You!!
2 Answers from Attorneys
You are kidding, right? You are using his "credit worthiness" to get the loan, but then the lender would not be allowed to expect payment from both of you? He is going to sign a loan agreement to repay the loan, but then you expect you can simply pull a fast one on the lender and he gets out of the contract just by giving you a quitclaim deed? Really? The loan is a loan. The property is merely security for payment. You can't both take out a loan and both agree to repay it, and then pull some scam and suddenly his promise to pay goes away. Please. Get serious.
I agree with Mr. McCormick. In California, a secured land transaction has two components, the written agreement covering the obligation, which is most often a promissory note, and the security, which is usually a deed of trust. The "quit" claim deed is irrelevant. He would still be personally liable on the underlying promissory note.
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