This is my first post here, and I do not consider myself a real estate investor I bought my poolhome to live in and enjoy it but need a bit of quasi-legal advice on a situation regarding a quitclaim deed that was signed by me and my wife in 2002. Okay here goes…
Florida, 2002. My wife and I owned a home that appraised for $220k. We bought it for $172k in 2000 and took a 2nd on it, sucking most of the equity out of it to pay off debts. Well Money got tight again, and me being young 22 yrs old and not knowing any better decided it was time to run for the hills and move out of the country. I made a lot of hard learned money mistakes at the time that I am still paying the price for today.
I got 60 days behind on our note and decided to put it for sale. I was an impatient seller, only had the home on the market for 1 month and only got a few bites but no serious ones as this was in the winter season. With all the collector calls and threats to take the home from the mortgage company I was scared into selling fast so as to save my credit at the time which was near mint after refinancing and clearing my debt loads. I called one of those “sell your house in 10 days” signs advertised throughout metro orlando and found that they would take the house, offer me some moving money (2000 dollars or so) and take over the payments, explaining to me fully what was going to happen. They would rent it to someone and build equity and sell it. Which was fine by me at the time I just wanted out of the payment.
I proposed what I was about to do to a family member and they offered me the same 2000 bucks and moved in and agreed to pay the note. This was in 2002 by the way. And the transaction was done by quitclaim. my family member got a “quick n easy” legal form at a mail box etc and i thought i signed my problems away. in fact they just started that day…
the mortage has been more than 60 days late about 30 times in the past 4 years, adversely affecting my credit and my wifes too. My credit score dipped from 650 to 519. Now i can’t even get a loan for a bucket or move in any apartment that requries a credit check, let alone apply for another mortage as this still shows in my credit report and who will give me a loan with a 220k debt thats hardly ever been paid on time…
legal aspects of this problem other than my credit going to hell… my family member shortly after filing quitclaim at the courthouse (record says she paid $100 for the house, i guess to save on taxes at the time) kept sending me these bankruptcy clippings from the florida phone book telling me how i should file bankrupt. i later found out that had i filed bankruptcy chapter 7 i could have kept my house as florida is a homestead state that allows you to do so. Had i known this i would not have left in the first place.
So as it sits I have no house, poor credit, and a $220,000 mortgage in my name. I need a few opinions on whats the best road to take in this matter. Do I have any recourse?? Should i call the mortgage company and tell them I haven’t lived there in 4 years… call the city where the quitclaim was filed… how to clear it up??
What I have learned is to only file BK to protect some equity. Sounds like you had little equity and perhaps still very little.
You have some options all of which involve going to court to get the house back. An expensive and timely proposition. The city where the quit claim was filed will be of no help or the county and the mortgage company could care less as well. If you owned it they may consider a deed in leu of foreclosure. If you could get a deed from the family member you may be able to make this happen.
You can sue your family member but good luck there again all the expenses involved in litigation.
The best option is to try to get the mortgage company to foreclose ASAP and then start over with re establishing your credit. It is amazing how fast you can get another loan with even a 550 score.
The only way, maybe not the only, but should get the job done is to call the lender and tell them you are no longer on title and do not live there. This will probably force a foreclosure and it will show in your name as the person being foreclosed on. (Please no bolts of lightning for this recommendation not on you whatyouneedplayer, but on me as there are investors who know what I am saying.)
I do not see any easy way out of this one, however you can re-build your credit even if this happens, do not drag it out or you will always be in the credit postion you are in, so cut your loses and move with your life.
However, my one question goes un answered did you and your wife both sign on the Quit Claim deed?
I think both me and my wife signed the quit claim… all in exchange for 2500… i will probably call SPS tommorow, what do you think will happen of the house… they are current on the payment but will they evict them etc… such family drama but its been hurting me a long time.
i dont really think it could hurt my credit much (foreclosing)… its already 519, which ranks in the red on the ‘poor’ scale and i dont have much to lose. what would happen of the equity in the home in the event of foreclosure? i wish i had come across this board sooner and spent less time on the volkswagen chat board. I want to thank all of you who lent me a hand i’m really learning a lot from just absorbing other peoples posts
my final question for the night, is there a “no bloodshed” alternative to getting my name off this thing. i shouldn’t have done business with family to begin with but at the time i was thinking keep it in the family etc, now the place is trashed, carpet messed up, pool dirty, holes in the wall etc… (can someone relate?) and we kept it pristine while living there. i would estimate about a good 8K cash needed to replace all the broken stuff and repaint it and get it some curb appeal if it were to ever sell.
can I as a mortgage holder sell the place, even if the $100 title is in my aunts name now from the quitclaim? (i was the original purchaser and homesteader). what would happen if she sold the place with me still being the mortgage holder?
You do no own this property, you have the mortgage in your name and your Aunt holds title to the property.
If she sells then your mortgage would be paid off and she will receive the proceeds from the sale.
She holds the cards even if the mortgage company forecloses and the property sells for more than is owed she gets the overage money.
The reason I asked about the Quit Claim deed is if you and your wife signed then all the interest in the property was signed off. I your wife did not sign she still owns 50% of the property and if forclosed on she and your Aunt would divide the proceeds. No, you cannot evict her even with a 50% ownership.
Good thought, but I don’t think Auntie is going to give it back as she realizes the property has some equity and it is her home, hard to do even for family.
Did you read the part about his Aunt not making payments on time at least 30 times, don’t suppose her credit is shot do you?
I also understand that the payments on this property do not reflect in her credit report, however when the lender looks to see how she made payments in the past what do you think her interest rate would be compared to what it is now if she could even qualify.
i have to agree with you there henry. On numerous times i’ve had the lender send her what they call an assumption packet that was supposed to clear my name from the mortgage for a $300 fee and its basically like her reapplying for my old house with less paperwork. Yet it obviously hasn’t been taken care of for reasons unknown to me (maybe she can’t quality as she already has a heavy note of her own and is retired, has poor credit, doesnt want the risk etc) I can just see the drama unfolding today i will let everyone in on what happens when i call the loan co.
Just curious now, how bad will a foreclosure dip my overall credit score, considering its one of my few open active credit lines, and how to rebuild it faster than it gradually fell over the past 4 years due to my aunts late/missing payments?
by the way I just wanted to thank everyone for the warm welcome and helpful experienced advice. if I can help any of you let me know, by trade I’m a professional webmaster and would be happy to offer my design and managment services to anyone in need in exchange for more help, advice, and info.
You should check out the forums for creditboards. I don’t think linking is allowed, but just do a search. In particular, check out the credit forum and the mortgage forum. You would be surprised in short a time you reestablish credit and get a new mortgage again. There are several people that have gone through foreclosure on that forum. There are also many mortgage brokers on there. After a few more years, you could refinance and get a more attractive rate and get rid of PMI with sufficient equity from appreciation.
I phoned the mortgage co. SPS and they said the mortgage is currently Current on payments but i still want it out of our names. They said the only way to remove our names from mortgage is to:
A) pay it off (umm okay… i dont have 200k in the bank and have bad credit 519 fico now)
B) refinance it while at the same time signing the loan over to my aunt. this is basically like her applying for it independently even though she is the title holder now
C) tell them i want to “turn in the keys” and they can do a deed in lieu of foreclosure. they said the debt would be wiped off my credit report owing once it sold but they may sell it for less than what i owe. but it will show as foreclosure on my credit report and i dont know whats worse, the debt dragging on and them missing payments or just foreclose, they kick her out of the house, shes mad at me for life (well it works about both ways on this house issue at least i’m pissed too my credits in the undertow)
the only way i see this being a “WIN WIN” for everyone in my opinion is if she were to put the title back in our name, put the place for sale, and then transfer all our namess off the property. Shes got her equity out maybe 30k or so and both our names off and we both win. I dont want a farting dime out of the deal though lord knows I could use it but she would have to agree to this and i can’t control what she does. Like I mentioned before I had the place for sale on the MLS and she took the sign down and was turning buyers away just a month after I left town.
If she wanted to keep the place she would have to get a loan on her own, simple as that. and it sounds like she just wants to squat on it. and thats not good enough for me as my name keeps getting dragged further and further.
I really wish I had not done this family deal now i have toss up between evicting my 60yr old family member and starting to rebuild my own credit for my own wife and kids sake. and I have no house now living in a shack.
My mom is having the same issue with my youngest sister. Sis is 3 months behind and has moved out of the condo and her son lives there. My mom has it sold for $30K equity and she borrowed the money to bring it current until it closes. Sis tried to get it refinanced but had no luck over the last 3 months. My mom took my advice and told sis to not worry about buying it that she had it sold. There was no deed or lease purchase or sub2 deal made just a mom and daughter handshake. It is still in the works and I hope mom can get it closed.