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bailey04
Feb 21, 2008, 12:06 PM
A friend quit-claimed her property (house/land and adjacent land parcel) to her brother, so that any liens filed on her due to debt would not affect the house. If the house is foreclosed on, will that affect her brother? The mortgage is still in her name, not in the brother's name. Any help would be greatly appreciated!

ScottGem
Feb 21, 2008, 12:16 PM
First of all, there is a very real question of the legality of such an action. The mortgage was a lien on the property. A lien is a legal encumbrance that says the property cannot be transferred until the lien is sataisfied. Therefore, if she quit claimed the property to her brother without paying off the mortgage, the lender can have the deed declared void and call the loan so the entire balance is due.

Also, there are tax consequences to transferring property to anyone other than your spouse. So she may find herself with a large tax bill. Or worse, she might be prosecuted for fraud.

I would advise her to get an attorney, NOW!