Legal Question in Real Estate Law in California

Re: Quit Claim Deed

The short answer to your question is "No."

A common misconception is that a deed and promissory note are somehow connected. They are not; they are two totally separate documents. Once you have a deed, the property is yours, whether you've paid for it or not, whether you've fulfilled your agreement or not. Likewise, once you sign a note, you owe the money, whether you've received anything in return or not. This is the reason escrow exists. Escrow allows a disinterested third party to hold the deed until it is paid for, thus protecting both parties from failure of the other to uphold his part of the bargain.

Get a lawyer to help you with this transaction. In the long run, he/she will save you money and a lot of grief.

Re: Quit Claim Deed

The best way for you to handle this situation is to place a demand into escrow for the amount of money you are owed, and receive a check directly from the escrow company. If you execute a quitclaim deed, you are essentially giving up any interest you might have in the property. In that case you have no leverage to make your ex-husband pay you what you are owed. On the other hand, if you sign on the new loan, you will be personally responsible for the new mortgage whether you live there or not. That means if your ex ever goes into default, you will either have to begin making payments to the new lender, or lose your interest in the house to foreclosure.

Finally, in California, simply executing a quitclaim deed after you sign on the new loan does nothing more than release your interests in the property, it has nothing to do with the actual loan. Therefore, you will still be responsible for the loan, and it will be reported on your consumer credit report.

You may want to set up a consultation with an attorney in your area to more fully discuss your options.

Re: Quit Claim Deed

First, if the value of your equity is more than a few thousand bucks, you should probably pay a local family law or real-estate lawyer to coach you on each step and generally advise you on your rights.

You should insist that the refinancing be handled through escrow using a reputable escrow firm. Unless the source of the refiance loan is super-private, the lender will require an escrow anyway.

Then, insist that you be paid the full and correct dollar or percentage amount of your equity interest upon close of escrow. If your pay-off is a condition of escrow, you can safely quitclaim through the escrow; otherwise, it's far too risky.

Having a family-law attorney review your judgment of dissolution and marital settlement agreement may be worthwhile if you have any doubt about how much you are entitled to in exchange for quitclaiming your interest to your ex.