quit claimed deed but still on mortgage and the other borrower passed away with no estate

[JLVdb]

Well I have read many forums but my situation is very unique. I bought a house with my exboyfriend and moved out a year later. He kept the house despite my plees to do a short sale as it was going upside down fast (bought in 06). I quit claimed the deed to him as he told me that was the only way to get my name off the mortgage. Why I believed him is beyond me. Anyway, he died suddenly the other month and not I am not on the deed but am the only person left on the mortgage and I don't live there and his parents refuse to make an effort to clear his stuff out in order for me at least to rent it. I can't force them to because technically I dont own the house but my credit is effected already so I kinda do own it. But where does the deed go? There is no estate as there is nothing but debt left. Now heres when it gets sticky. He did a loan modification a year and a half ago but I never signed it. I had the bank print it out and is says his name and my name but the place for my signature is empty. Can the mortgage be null and void since it was modified without my concent? The bank says the mortgage has nothing to do with the deed, but contradict themseves by saying they didnt need my signature since I am not on the deed. Is there a loop hole? Will they garnish my wages for the debt? Please any advice would help.
Thank you

[MsPetiteMN]

Wow...what a tricky situation.

First, let me provide an brief explanation of the documents that make up a mortgage loan transaction:

1) The Note is what you are re-paying. The money financed was used to purchase the home.

2) The Mortgage (or Deed of trust) secures the Note. The mortgage secures the collateral (the home) and is what give the banks the enforcement remedies to foreclose when you default on the Note.

3) The deed (not the same as the Deed of Trust)....conveys ownership of the collateral. By executing a quit claim deed, you conveyed your ownership interest in the property to your ex-BF.

The bank is right....the mortgage does not have anything to do with the deed. You are still obligated to the Note, but you no longer have an ownership interest in the collateral securing the Note. The only way to have your name removed from the mortgage was for him to refinance the loan in his name only. The quit claim deed was between you and him; not you, him and bank. So it does not affect your obligation to the Note.

You don't "kinda" own the property, so you can't put renters in it. Your credit is being affected because you are still obligated to repay the Note, not because your name is on the mortgage.

Also, with respect to the loan modification without your consent, it does not nullify the mortgage or the initial loan transaction. It may nullify the loan modification itself. Depending on the loan modification product, your signature may not have been required. Most likely, you were not harmed, but actually benefited from the modification. So that is a non-issue.

You will never own this property, so IMO, there is no reason for you to make payments towards it. I am not an atty, CPA or anything...but IMO, you should just consider this a lesson learned and walk away.

In order to answer your question about garnishment, we need to know what State the property is located.

I hope this information has been helpful.

[JLVdb]

I have been told to attempt a deed in lieu of foreclosure and a release of judgment against me but how can I do that if I do not own the deed? But neither does he or anyone. I definitely find your info helpful but exactly what I feared. I would love to walk away and not worry about it and not apply for credit for 7 years but I just fear they will garnish my wages or come after me for the difference.

[MsPetiteMN]

Again, in order to answer your garnish question, what State is the property in?

I agree, I am not sure how you can do a Deed in Lieu since you do have the authority to convey the deed.

[JustSharon]

There is no estate as there is nothing but debt left.
Thank you

The estate also owns the property. It doesn't just belong to "no one" because the owner died. And the estate is responsible for the note and for handling any other debts and/or assets he had. For example, if he had a car, it now belongs to his estate. Someone (his parents, siblings?) should be appointed administrator of the estate. If he left no will appointing an executor, or if no close relative has applied to be administrator of the estate, the court may need to appoint someone to handle it.

But since you are also on the note, you may also have an obligation.

I suggest you answer the question as to which state the property is in. That may make a difference as to whether the bank can "come after you."

I suspect that you may need a lawyer to help to straighten this out. As far as I know, the people on this forum are knowledgeable, but not lawyers. So you may want to start thinking about that.

[JLVdb]

the property is in Florida

There is no estate formed by the family because there is only debt left from many angles. Since I am not on the deed, and the other owner is not on the deed, can't the bank take over the deed and grant me the deed in lieu of? I have no idea how to get the deed or why I would want to just to sign it right over to the bank as I want nothing to do with the house

[GoingBrokeFast]

You need legal counsel immediately. The fact that the owner of the property is dead does not mean that the property belongs to no one. The bank can force the estate probate in most if not all states. I am a lawyer but do not practice in Florida. I can only give you some idea of general principles involved here but not Florida law. an public administrator can be appointed. You are still on the note and mortgage and carry the same obligations. Did the late owner have mortgage life insurance to pay off the loan? One thing to look into. You also need to find out what rights, if any, you have to the property and if you need to file suit to try to recapture title to the property since you are on the mortgage and note in order to try to deal with your obligations and protect yourself. Also, and i can not tell you if this applies in Florida, mortgages can have due on transfer clauses which means the entire balance of the mortgage would be be due upon deeding over your interest in the property. The fact that the estate is not being probated is concerning since there appears to be no one trying to resolve anything and just leaving you dangling.

This is similar to divorce cases where one party is awarded the marital home, it is deeded over but the party taking sole title can not refinance to remove the other party and this can happen with the other party defaulting on the mortgage or dying.

I repeat that you need Florida legal counsel now.

[MsPetiteMN]

I agree..you should definitely seek legal advice in Florida. Because FL is a judicial foreclosure state, the bank can sue you for a deficiency judgment after they foreclose and sell the property. Meaning, yes...they could come after you for the balance and if they obtain a money judgment, could garnish your wages.

The only way the bank will be able to "take over the deed" of the property is by foreclosing. You can't do a Deed in Lieu of foreclosure because you are no longer on the deed. So you can't just sign it over in lieu of being foreclosed upon. Yes, you are still on the Note and the Mortgage, but, as I stated before, you conveyed your ownership interest in the property securing the Note when you executed the quit claim deed.

His family has no obligation to pay this mortgage loan, so they will probably just let the home go into foreclosure. Definitely listen to GoingBrokeFast and seek advice from a FL atty...especially to determine if you can somehow get your name back on the title of the property.