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Hi I wondered if anyone could help me I am living with my partner but the mortgage is only in my name. I am divorced and I kept the house (bought my ex out) As my new partner pays half of everything I think it is only fair he is included in my mortgage. Can anyone please advise how you do this, if it costs, if the mortgage company will do this (he is self employed)
Thanks
I think you could contact your lender and ask them to do an addendum to your mortgage to have this person added.
Do you want him added to the deed?
Frankly, if I were your partner I would not do it. What you are asking is to have them take on an obligation with none of the benefits. You want them to sign a loan note on property they have no interest in.
What you SHOULD be doing is asking your lender to help you add your parnter to the deed AND the mortgage. As long as there is an outstanding loan then you can't change the title without the approval of the lien holder.
Another alternative is simply to refinance the loan. As part of the refinance you quit claim the property to yourself and your partner.
Scottgem, sorry I think I asked the wrong question there. What I want is for him to be entitled to half the equity, as he is paying half the mortgage with no benefits and he didn't purchase the property he intended to buy because he is now living with me.
What do I need to do have his name added and added to the deed?
Thanks
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.
Ok thanks for your help I will do that
ScottGem I have to disagree with you on this one, only because I work for a mortgage company and we do this all the time. You do not need the permission of your lender to add someone to the deed. You as the owner and already on title to the house can quit claim anyone you like. You simply fill out a quit claim and add them on. As far as adding them to the "note" or the "mortgage", what you will need to do is refinance your existing mortgage and add them as a coborrower. This will not only be adding them to title but adding them to the financial side of it as well, in turn achieving what you were looking to do. Your partner would now be entitled to half of the equity in the house.
Erica, by doing this you are also giving your partner half the equity in the house even though he did not contribute to the down payment or earlier payments. I realize you want him to have some benefits but this seems out of balance.
Thanks
Ballenger I understand it would do this but as Ive re-mortgaged recently buying my ex-husband out there isn't at present much equity in the property but in years to come there will be, especially as my partner is doing so much work on the house. In my eyes its like a new mortgage that we are both contributing to. But I will think carefully and not jump into it lightly.
Thanks
Are you sure about this? I used to work for a bank. If you have a lien against a property that property cannot be transferred without permission of the lien holder unless the lien will be paid off. If Erica tries to register the quit-claim, the lienholder will be notified and the quit-claim may invalidated. That's the whole purpose of a lien.Quote:
Originally Posted by kanicky73
A Quit claim doesn't ADD a person to a deed. It transfers ownership from the current owner to another owner or set of owners. That set of owners could include the original owner.
I don't know your personal details but you have a great deal invested that you're not thinking about. Include what you paid to your ex and the diffrence between the mortgage and the market value. That is how much you have into the property that your new partner has not paid. "there isnt at present much equity in the property but in years to come there will be" I betting that there is 10s of thousands in equity right now.
I disagree with you Kanicky73.Quote:
Originally Posted by kanicky73
The borrower should look at her copy of the Note and Deed of Trust. More than likely there is language in those documents that state - If all or part of the property or any interest in the property is sold or transfered without the Lender's prior written consent, then the Lender may require payment in full.
I am absolutely positive. The "note" and the "title" do not have to have the same people on it. The note is the promise to pay the lender back. When the loan is orininally done the only people on the mortgage are put on the title. Once that transaction is completed you can add whoever you want on the title. Does that mean if you are added to title but not on the note that you have special ownership if the other person dies and there is still a mortgage owed? No. There would still be a mortgage owed and the bank would probably come calling on you. You can add whoever you want to the title. Those people do not have to be on the note. I just did it for an elderly woman who wanted her son on title but didn't want to refi him onto the mortgage. She wanted to make sure that when she passes away he can get the house. We quit claimed him onto the deed. Simple as that. In this case though, if I were her I would refi him onto the mortgage which in turn will put him on title.
I agree that the note and the title do not have to be the same. But I can't believe a lender would allow title to change after the fact without their approval. Because that CAN cloud the title and affect their lien.
20 years in the RE industry here.
Again: If all or part of the property or any interest in the property is sold or transfered without the Lender's prior written consent, then the Lender may require payment in full.
First the Borrower should confirm that the "acceleration" clause is in the security instrument recorded on his property. And more than likely it is.
This is a provision gives the Lender the right to demand payment of the remaining balance of the loan if the property is sold or any of the borrower's interest is transferred. It is a contractual right, not a law. This means that if title to the property is transferred or part of the interest, the bank may (or may not), at its option, decide to "call the loan due."
Will the Lender call the loan all due if you transfer a portion of your interest without notifying them? Probably not. Is it worth the risk? Absolutely not.
I feel compelled to throw in my two cents worth into what has become a debate on the "Due on Sale Clause" found in Mortgages and Deed of Trust. I must side with those who disagree with kanicky73. A quick web search provided the following link that addresse the issue in detail: The truth about getting around due-on-sale clauses by John T. Reed . The only exception (that I could find) for the DOSC not being triggered is in the event of a divorce. For many years I had been under the impression that a single borrower could add his or her new spouse to the deed without a problem. I may have been wrong.
I think that any lender would be happy to have someone added to a property as long as they were added to the loan as well. Nor do I see them exercizing the DOSC clause if its adding a new spouse. But, legally, a change in ownership could affect the lender's lien.Quote:
Originally Posted by Dr D
I just keep going back to this one thought - if the title/deed is not in the mortgage holders name and the lender calls the loan due to non-payment or whatever - what will that do to them getting their $ back? Can they still foreclose on the property if the deed is not in the mtg. holders name?
A lien is on the property not against a person. That's why its rare but possible for the signers of the note to not be on the deed. However for that to happen the signers of the note would have to prove their interest so the lender can place the lien.
Otherwise, what's to stop me from going to a lender and getting a loan using your home as collateral? That's also the reason why a lender would not want to permit a title change. It would serve to cloud the title in case of a foreclosure.
No and no.Quote:
Originally Posted by ScottGem
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...
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.Quote:
Originally Posted by Home Retention Agency
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?
This is very common practice, particularly when people get married.Quote:
Originally Posted by ScottGem
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?
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.Quote:
Originally Posted by Home Retention Agency
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. :-)
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.Quote:
Originally Posted by kanicky73
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.
How does a transfer of ownership "cloud" the title, with regard to a mortgagee's interest in a property?Quote:
Originally Posted by ScottGem
[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?
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?Quote:
Originally Posted by ScottGem
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.
Would you like for me to give you an example?Quote:
Originally Posted by Home Retention Agency
Absolutely!Quote:
Can you give us specific examples of this happening... preferably instances where you have direct, personal knowledge?
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.Quote:
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?
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".
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.Quote:
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.
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... ]
For "first in time" states, the priority of liens is fairly straightforward.Quote:
Originally Posted by LisaB4657
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.
That would certainly be interesting if you did.Quote:
Originally Posted by LisaB4657
Is this really necessary? I think it terribly uncalled for.Quote:
Originally Posted by Home Retention Agency
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.
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.Quote:
Originally Posted by Home Retention Agency
Then you would continue to be wrong.Quote:
So, I'm sticking by the statement regarding change in ownership.
Where is the IRS lien recorded?Quote:
Originally Posted by LisaB4657
Can you cite the statute that says you can transfer ownership of a property without the permission of the lienholder?Quote:
Originally Posted by kanicky73
"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.
In the county clerk or county register's office where the person resides.Quote:
Originally Posted by Home Retention Agency
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.
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