Legal Question in Real Estate Law in California

Quit Claim on unassumable mortgage
Can a quit claim be filed giving property to a person(s) not on the deed? And, is that person still liable for the loan? We have been living in the home since Nov. 96 after giving the owner $7000 to "catch" her up on her loan. We were told that she just wanted out and all she wanted was the back payments and we would take over the loan. We have not been able to qualify for a loan and she says she can not sign the house over to us. Instead, she says the house is still hers and wants to resell it.

Asked on 7/15/99, 1:41 am

Jed Somit Jed Somit, Attorney at Law

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Re: Quit Claim on unassumable mortgage

Yes, a quit claim deed can be given to someone not already

on title, although a grant deed is preferable. If the property

were deeded to you, you would not be personally liable on the loan, but

the loan could be foreclosed and you could lose the property. Most

loans have a "due on transfer" clause which allows the lender to make

all of the loan immediately due on transfer. However, there is no

mechanism automatically informing the lender of a transfer. The risk is

that if the loan is called, you would need to get financing before the foreclosure

(about 121 days minimum) or you would lose all of your interest in the property.

Whatever your agreement is with the owner, it should be put in writing.

Answered on 7/20/99, 1:00 pm

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