When the economy is not doing well, thousands of persons may very well lose their occupation as well as their capacity to carry on meeting mortgage payments. When that happens, the inevitable follows – foreclosure of the property is looming in front in the horizon. If no action is being taken, the lender will foreclose the property, and the homeowner will become homeless.
If you find yourself to be in a similar position, you may need to find a originative solution quickly. Some may suggest using a quitclaim deed to keep away from foreclosure. That may sound like a good idea, when it is in truth not. You will soon see why.
A quitclaim deed is a legal document that passes the rights of the property from the grantor (the property owner), to the grantee (the person receiving the rights). The document will then have to be filed with the state county.
But bear in mind that the quitclaim deed may support you, or it may fetch hurt to you. What you need to do, is to be clear regarding what the document entails, so that you may make the right decision.
To elaborate further, you may use a quitclaim deed to transfer the rights of the property to another person. But that doesn’t free you from mortgage commitments. You will still need to find a way to repay your lender. But with the quitclaim deed, the lender cannot foreclose your home.
The goal is simple. Use the quitclaim deed to get yourself more time. Often, householders can not meet mortgage payments due to temporary circumstances. If you lost a occupation for the duration of the economic downturn, you may always get a new occupation some time down the road. The economy will recover after a heap of time. It always has. So it makes no sense to make matters worse by letting the lender foreclose your home. That makes it even harder for you to recover from the crisis that you are already facing.
However, it is necessary to note that the quitclaim deed will not work in all circumstances. For example, if there is a “Due on Sale” clause that is included in the mortgage contract, the homeowner will have to recompense off the mortgage upon transfer. Check with your lender to see if the clause applies to you. The quitclaim deed may be viewed by the lender as a sale, and the clause may be activated.
Then there may be scammers who are lurking round the corner, looking to take vantage of desperate homeowners. They undertake to trick the homeowner into believing that they may stop the foreclosure process, by transferring the rights of the property to a third party entity, such as a land trust or grant. In return, the homeowner has to pay the scammer rent to proceed living in the house. However, all this while, the foreclosure procedure is still taking place.
When you consider the data above, it makes little sense to use the quitclaim deed to stop foreclosure. This document mainly exists to simplify the transfer procedure amidst family members. It’s never meant to help householders keep away from their financial obligations.
Quit Claim Deed In Lieu Of Foreclosure
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