Legal Question in Real Estate Law in Florida
Quit claim/Grant deeds?
I own a home with a due on sale clause mortgage. I would like to sell my home to a friend I trust but, who does not qualify for a mortgage because of a dead beat x. Is it possible to transfer the property to this party through a Quit claim or Grant deed. They will pay me, I will pay the mortgage co. for a specific length of time and when this party's credit is straightened out we will get a warranty deed and a bank mortgage. If the guit claim/grant deed is recorded will my mortgage co. exercise their right under the due on sell clause?
2 Answers from Attorneys
Due on Sale Clause -- Fla. Sale
If the quit claim/grant deed is recorded will my mortgage co. exercise their right under the due on sale clause?
They could if they decide it's worth it. If the balance due is small and their risk is low, they may not. Under no circumstances would I proceed the way you have outlined! Too much risk for you! You can structure the sale to lower the possibility they will find out about the sale. Instead of the wrap-around mortgage that you propose, you may want to consider a written trust. Your unwritten "trust" is a bad idea. You will need the help of an attorney to do it.
Due on sale clause
Yes, the mortgage company could exercise its right.However, with interest rates as low as they are, itmight not make sense for them to do so. Also, aslong as they are receiving payments, most mortgagecompanies are not looking to foreclose on property.
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