Quit Claim Deed Foreclosure and Divorce
Foreclosures and divorce are processes that have different legal implications and thus, a distinction should be made between them. When it comes to foreclosure deeds and divorce, these two processes are often confused because both involve the repossession of a property. There are two things to consider when looking at a quitclaim deed foreclosure in divorce:
You need to determine if you really have gotten into a financial bind and can no longer pay your mortgage.
You must determine if the lender is willing to accept this type of arrangement.
There is nothing in writing as to how long you have to pay on your home so in most cases the lending institution simply accepts the loan foreclosure and sells the property. If you are able to sell the property for enough money to pay off your mortgage then you will most likely have a chance of stopping the foreclosure.
Should I Sign a Quit Claim Deed in a Divorce?
A quitclaim deed in a divorce is an agreement that you enter into with your divorce attorney. It is used to create a "successor spouse" or "successor trustee". Which is responsible for paying alimony, child support, and/or any other debts your spouse had. It also names a new legal entity (the quitclaim deed) that will take over your debts from the previous entity. This document does not change the responsibilities that you have, it simply names a new entity to pay those debts.
The reason you should not sign a quitclaim deed in a divorce is that it is only one part of the divorce process. You will still need to execute a power of attorney for the deed to go live. And then file your final divorce decree. There is nothing stopping your spouse from renaming the power of attorney or filing their own petition if they choose.
So, should I sign a quitclaim deed in a divorce? If your spouse's power of attorney was not registered properly when you got married, you can file to have it registered, and thus have full rights as a co-owner of it. If your spouse has a current power of attorney that you did not sign, you can fill out and file for a Change of Use with the courts. Either way, you will still be legally responsible for all debts that were incurred by your spouse during the time you were together, so you should not sign a quitclaim deed. As long as everything was filed correctly at the time you got married, you should be fine.
Is it The Best Way to Stop Foreclosure after Divorce?
In most cases, it is extremely difficult and expensive to stop a legal foreclosure from taking place. You have probably exhausted all possible options, worked out an alternate payment plan or to keep the property from being foreclosed upon. This is not a situation that you should put yourself into because it can be costly and time-consuming. Do everything you can to save your credit rating and try to renegotiate with your mortgage company for a short sale of the house.
Most banks will only agree to a quitclaim deed if you are able to show them that you are not a risk. This means that you have done all you can to repay the loan including keeping up with payments on the mortgage. If the bank believes that you are still a risk they will most likely not agree to a quitclaim deed. To increase your chances, contact a foreclosure attorney.
Stop Foreclosure With a Quit Claim Deed Foreclosure Attorney
To feel all documents correctly, the homeowners must hire a reputable and reliable foreclosure attorney. When drafting the documents that will help you stop foreclosure, make sure that you include all of the necessary conditions necessary to make it legally binding. For instance, you must have had your home for less than a year when you are drafting your deed and your mortgage must be current and up to date. The bank will also need to be informed of the pending foreclosure. If you received a letter from the lender notifying you of the impending sale of your home, then this will also need to be included with the deed.
Benefits of hiring an attorney for quitclaim deed foreclosure in a divorce:
You're able to find a court order directing the mortgage lender to discharge you.
Your loan agreement specifically requires the creditor to let you off the mortgage when there is a deed shift. This could occur in an owner-financed loan.
A deed of this type is very difficult for the bank to ignore and it shows a lot of confidence in you as a borrower. This gives you leverage when negotiating with the lender to stop the foreclosure. However, it is imperative to take care when preparing your documents so as not to make any mistake that will cost you time, money, and your home. For instance, you must make sure you understand exactly what the terms of the deed of your home will be and what these terms will do to you should you decide to stop the foreclosure.
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