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Originally Posted by ScottGem

Like I said, you need to get the permission of the lender. Then execute a quit claim deed, deeding the property from you to both of you. The lender can help you do this.

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No and no.

You do not need the lender's permssion to QC it to yourself and another person.

And, the lender will most likely NOT help you to do this.

You can contact your local county courthouse, and they may tell you what's needed, or you can get in touch with the title company/closing attorney with whom you did your refi and they can assist you with this matter.

It's a very simple process, however be sure that this is really what you want to do, as this is really tough to reverse without your partner's full cooperation once it's done.

BEFORE you do this, I think it would be smart to get a full credit report on your partner, as well as a background check. Once you share ownership, that person's problems become yours. Any past or future judgments can be attached to that property, whether you had any involvement or knowledge.

This may not be a comfortable conversation to have, but let me tell you a few stories about some people who didn't do this...

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Originally Posted by Home Retention Agency

No and no.

You do not need the lender's permssion to QC it to yourself and another person.

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The purpose of a lien is to PREVENT the transfer of ownership of a property untiul the lien is satisifed. If one doesn't get the permission of the lender the lender can call the loan.

Most likely they will not object to just adding someone like a spouse or partner. Is it worth the risk to take the chance and not ask them?

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Originally Posted by ScottGem

Most likely they will not object to just adding someone like a spouse or partner. Is it worth the risk to take the chance and not ask them?

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This is very common practice, particularly when people get married.

But do you honestly think that they spend any time investigating this?

As long as the original borrower is still on title, what are the odds of this being questioned?

In today's environment, with foreclosure rates as high as they are, do you think that the lenders have added mattress police to track down these types of transfers?

Do you really think they want to ADD to their foreclosure rolls?

I would suggest that if this appears to be a risk anyone, they might first stop jaywalking, quit driving a car, and cut their calorie consumption by 25% or more... as all of these involve higher risk than adding someone to title.

If this person does contact the lender for "permission," I'd be curious to see how many hours they invest in obtaining this variance, and whether they ever obtain it in writing.

A simple phone call to a rep from the lender may suffice. And I agree the likelihood of a refusal or it being questioned is small. But that doesn't change the facts.

Again, when a simple phone call can take care of this, why not make it?

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Originally Posted by Home Retention Agency

This is very common practice, particularly when people get married.

But do you honestly think that they spend any time investigating this?

As long as the original borrower is still on title, what are the odds of this being questioned?

In today's environment, with foreclosure rates as high as they are, do you think that the lenders have added mattress police to track down these types of transfers?

Do you really think they want to ADD to their foreclosure rolls?

I would suggest that if this appears to be a risk anyone, they might first stop jaywalking, quit driving a car, and cut their calorie consumption by 25% or more... as all of these involve higher risk than adding someone to title.

In the event that this person does contact the lender for "permission," I'd be curious to see how many hours they invest in obtaining this variance, and whether or not they ever obtain it in writing.

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The bottom line is, it's not advisable to encourage someone to go against their terms of their written agreement. The Borrower should contact the Lender. An issue that has already been addressed in this thread.

I think where the all the confusion in adding someone to the deed etc was coming in is that most people are under the impression that your note and your deed are the same thing. The lender only cares about who "promised to pay" the loan back. For example if a husband and wife get a divorce and the wife is given the house in the divorce and then doesn't make the payments, the lender can go after both people. A divorce decree is simply an agreement between the two parties not the lender. So along those same lines, you can add whoever you want to your deed. If the persons on the note default on that loan they will go after who signed the note, not who is on title. Now if this were a car note we were talking about, that you do need the lenders permission to add someone to the title of the car. I know I jumped around to a few different scenarios, but I think you get the jist of it. :-)

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Originally Posted by kanicky73

I think where the all the confusion in adding someone to the deed etc was coming in is that most people are under the impression that your note and your deed are the same thing. The lender only cares about who "promised to pay" the loan back. For example if a husband and wife get a divorce and the wife is given the house in the divorce and then doesnt make the payments, the lender can go after both people. A divorce decree is simply an agreement between the two parties not the lender. So along those same lines, you can add whoever you want to your deed. If the persons on the note default on that loan they will go after who signed the note, not who is on title. Now if this were a car note we were talking about, that you do need the lenders permission to add someone to the title of the car. I know I jumped around to a few different scenarios, but I think you get the jist of it. :-)

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I still disagree. If you were talking about an unsecured loan you would be right, but in a secured loan the lender needs to know they can recover the collateral in case of default. Therefore, they do not want clouds on the title to inhibit a foreclosure.

To use your divorce example, the couple agrees that the wife gets the house. The husband then executes a quit-claim deed to the wife. The lender gets informed about the change and says sorry no. If you want to make a change of ownership we are calling the loan.

As I've said before the purpose of a lien is to prevent transfer of ownership of a property until the lien is satisifed. This give the lienholder the right to have a say in ANY change of ownership.

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Originally Posted by ScottGem

I still disagree. If you were talking about an unsecured loan you would be right, but in a secured loan the lender needs to know they can recover the collateral in case of default. Therefore, they do not want clouds on the title to inhibit a foreclosure.

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How does a transfer of ownership "cloud" the title, with regard to a mortgagee's interest in a property?

[QUOTE=ScottGem]To use your divorce example, the couple agrees that the wife gets the house. The husband then executes a quit-claim deed to the wife. The lender gets informed about the change and says sorry no. If you want to make a change of ownership we are calling the loan. QUOTE]

Can you give us specific examples of this happening... preferably instances where you have direct, personal knowledge?

How, exactly, could a lender prevent an owner from recording a QC?

Would they send representatives down to the courthouse to intercept the document?

Would they infiltrate the county computer system to erase it and destroy the evidence after it's recorded?

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Originally Posted by ScottGem

As I've said before the purpose of a lien is to prevent transfer of ownership of a property until the lien is satisifed. This give the lienholder the right to have a say in ANY change of ownership.

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Is the purpose of a lien to prevent transfer or is it to establish priority of claim and document the lienholder's interest in the collateral?

Please tell us, specifically, how a change in ownership would inhibit or compromise a lienholder's ability to collect on the debt, or foreclose when necessary?

Scott, you're probably a bright guy, but it's not helpful if you're giving advice that's incorrect and clearly out of your sphere of expertise.

I noticed you've made over 9,000 posts. I hope that those posts were better-informed.

I must defend Scottgem's position. The main purpoe of the Due on Sale Clause is to prevent a non creditworthy buyer from assuming a mortgage. The lender's right to do this has long been settled by the courts. Just because lenders don't always enforce this right does not mean that they cannot. There is a Federal exemption for transfer of property to an ex, in case of divorce. That is the only exemption that I have been able to find. The link that I posted earlier, even states that the DOS clause can be triggered by a lease of over 3 years, or a lease with an option to purchase. In the real world, the lender would not be aware of such a lease unless the document was recorded. Home Retention Agency and kanicky73 are confusing "the law" with "customary practice".

The problem here is you are making assumptions about my knowledge and information. In this thread, I am obviously not the only one taking this position, So I don't believe I am giving incorrect advice. Nor do I appreciate the attempted aspersions on my record based on one difference of interpretation.

The incorrect advice here would be to ignore the fact that the lienholder has the right to a say in any change of ownership. I stand by my statement that the purpose of the lien if to prevent transfer of ownership. Obviously a lien does establish priority and document a claim against the property. But the primary purpose is as stated.

I didn't say a lender could prevent the recording of a QC. I do believe that a Recorder of Deeds would be tasked with informing the lienholder of any attempt to change ownership. Once informed, they could then exercise the Due on Sale clause to call the loan.

As Dr D points out, I'm referring to what the law says is possible, not what might be usual practice. Therefore, my advice, which I stand by, is that anyone seeking to alter the ownership of a property that has a lien against it, should get the permission of the lienholder. Not doing so, could cause the loan to be called or other complications. If you have any facts that directly contradicts that advice feel free to produce it.

I had to go back and read my note on my house. And it has a whole paragraph dedicated to this subject.
And it has already been said in the thread - but thought I should say it again, so here goes (straight from my house note)

"If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in borrower is sold or transferred and borrower is not a natural person) without lender's prior written consent, lender may, at its option, require immediate payment in full of all sums secured by this security instrument.
If lender exercises this option, lender shall give borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which borrower must pay all sums secured by this security instrument. If borrower fails to pay these sums prior to the expiration of this period, lender may invoke any remedies permitted by this security instrument without further notice or demand on borrower.

So - having said that - yes you can go to the court house and file a new deed - but you will be in violation of your note. And they could call your loan due.

And my mortgage says the same thing.

Ya know, I really love it when someone shows up here and they know more than anyone else.

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Originally Posted by Home Retention Agency

How does a transfer of ownership "cloud" the title, with regard to a mortgagee's interest in a property?

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Would you like for me to give you an example?

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Can you give us specific examples of this happening... preferably instances where you have direct, personal knowledge?

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Absolutely!

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Please tell us, specifically, how a change in ownership would inhibit or compromise a lienholder's ability to collect on the debt, or foreclose when necessary?

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Ok. Let's say that an unmarried woman, Jane Smith, owns a house. And she mortgages it to Bank of America. She makes all of her monthly payments on time.

Then she meets John Doe, an unmarried man. They get along great and decide to live together in Jane's house. After a couple of years Jane decides to add John to her deed since he's been so great about helping to make the mortgage payments every month. So she goes to Office Max, picks up a form of quit claim deed, prepares it, signs it, and records it.

But in John's deep, dark past there's a little fact lurking... the IRS has filed a lien against him for unpaid taxes and has been religiously renewing it when necessary. Now an IRS agent finds out that John is suddenly a property owner. So the IRS immediately files a notice of foreclosure.

Is Bank of America automatically prior to the IRS? What if the IRS filed and perfected the lien against John before the Bank's lien was filed? I haven't found any cases on point yet but I'm not killing myself looking. The main point is that the priorities of the respective liens are not defined without a lawsuit. So this is "how a change in ownership would inhibit or compromise a lienholder's ability to collect on the debt, or foreclose when necessary".

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Scott, you're probably a bright guy, but it's not helpful if you're giving advice that's incorrect and clearly out of your sphere of expertise.

I noticed you've made over 9,000 posts. I hope that those posts were better-informed.

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Aww... now you're just being nasty. Scott's advice was 100% correct regardless of whether you think this is within his sphere of expertise.

And BTW... this topic IS within my sphere of expertise.

I broached the subject of paying for your partner's sins in a previous post...

[BEFORE you do this, I think it would be smart to get a full credit report on your partner, as well as a background check. Once you share ownership, that person's problems become yours. Any past or future judgments can be attached to that property, whether you had any involvement or knowledge.

This may not be a comfortable conversation to have, but let me tell you a few stories about some people who didn't do this... ]

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Originally Posted by LisaB4657

Is Bank of America automatically prior to the IRS? What if the IRS filed and perfected the lien against John before the Bank's lien was filed? I haven't found any cases on point yet but I'm not killing myself looking. The main point is that the priorities of the respective liens are not defined without a lawsuit. So this is "how a change in ownership would inhibit or compromise a lienholder's ability to collect on the debt, or foreclose when necessary".

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For "first in time" states, the priority of liens is fairly straightforward.

Even if the IRS did foreclose, previously recorded liens have priority.

So, I'm sticking by the statement regarding change in ownership.

I won't waste time recounting the dozen or so IRS liens we've gotten released, with or without any funds going to the IRS.

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Originally Posted by LisaB4657

I haven't found any cases on point yet but I'm not killing myself looking.

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That would certainly be interesting if you did.

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Originally Posted by Home Retention Agency

That would certainly be interesting if you did.

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Is this really necessary? I think it terribly uncalled for.

No I think what is getting confusing here is that all of these instances are different by state. In the state I live in, you can add anyone you want to your deed and take anyone off your deed, with or without your "lenders" permission. I stated this before and will state it again. I work for a mortgage company and have and still do this very thing regularly. None of my clients have ever had their mortgage "called due" because of it. So the best advice I can give the original poster of this question is check your state laws on this subject to be sure that you are following the law appropriately.

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Originally Posted by Home Retention Agency

For "first in time" states, the priority of liens is fairly straightforward.

Even if the IRS did foreclose, previously recorded liens have priority.

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If the IRS recorded a lien against John Doe before the Bank of America recorded the mortgage with Jane Smith then the IRS lien is a previously recorded lien. Even if Bank of America were to make the argument that the recording of that lien did not serve as public notice to subsequent lienholders it would still have to prove its priority in a foreclosure action by the IRS. Or, if Bank of America were to attempt to foreclose first it would have to prove the superiority of its lien as against the IRS. I never said that Bank of America would lose the case. But I would say that this inhibits or compromises Bank of America's ability to collect on the debt or foreclose when necessary, which is exactly the type of example you requested.

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So, I'm sticking by the statement regarding change in ownership.

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Then you would continue to be wrong.

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Originally Posted by LisaB4657

If the IRS recorded a lien against John Doe before the Bank of America recorded the mortgage with Jane Smith .

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Where is the IRS lien recorded?

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Originally Posted by kanicky73

No I think what is getting confusing here is that all of these instances are different by state. In the state I live in, you can add anyone you want to your deed and take anyone off your deed, with or without your "lenders" permission. I stated this before and will state it again. I work for a mortgage company and have and still do this very thing regularly. None of my clients have ever had their mortgage "called due" because of it. So the best advice I can give the original poster of this question is check your state laws on this subject to be sure that you are following the law appropriately.

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Can you cite the statute that says you can transfer ownership of a property without the permission of the lienholder?

"I work for a mortgage company and have and still do this very thing regularly"

But if you work for the lender and you are doing it, then ergo, they have the lender's permission! Or am I missing something there.

Finally, the lender is probably aware of state laws, so asking the lender may satisfy both pieces of advice.

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Originally Posted by Home Retention Agency

Where is the IRS lien recorded?

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In the county clerk or county register's office where the person resides.

If Jane Smith had contacted her lender and asked that John Doe be added as an owner and added onto the mortgage then the lender would require a new title search be performed. At that point the IRS lien would show up. But if Jane just adds John to the deed without contacting the lender or having a title search done then John's property (including after-acquired property) becomes subject to levy by the IRS. That inhibits the lender's ability collect on the debt or foreclose if necessary.