Legal Question in Real Estate Law in California

Re: grant deed and quit claim deed

No it probably is not legal and yes, it probably is a scam. If you simply transfer title to the property to another person without that person obtaining a new loan to pay-off your existing loan or loans, the transfer will not help you. You (or someone else) will still have to make the monthly payments to your existing lender(s) or the house will go into foreclosure and the lender will take it back regardless of who is on title. In addition, you may very well be violating the Uniform Fraudulent Transfer Act and/or committing loan fraud. My suggestion is don't just walk away from this "deal," run!

If you are having trouble making your mortgage payments, there are a variety of legitimate methods of dealing with that situation, including the filing of a bankruptcy. There are also assistance programs from the Federal Government which can help.

Re: grant deed and quit claim deed

The proposed deal would probably not be a fraudulent transfer if you reacquired the house, since you would reacquire it subject to the same mortgage. However, you would not accomplish your purpose.

The problem is that there are only three choices: (1) Pay the loan; (2) Suffer a foreclosure; or (3) Commit a fraud. There is absolutely no middle ground. Further, #3 will ultimately lead to #2 (or #1) and you will have gained nothing. By the way, the road to #1 or #2 often leads through bankruptcy court, but that's better than being sued for a fraudulent transfer.