I own a single family house in Passaic County. I have 2 mortgages on it, at high interest rates. Bought house during the boom, now underwater. My brother is on the deed with me, but I am only one on mortgages. I want out.
Can my brother file a Quit claim on house, then go to mortgage companies to assume mortgage(s) responsibilities, then refinance? Will they let me off the hook?

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Originally Posted by tonidella

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Can my brother file a Quit claim on house, then go to mortgage companies to assume mortgage(s) responsibilities, then refinance? Will they let me off the hook?

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Doubtful. What you are describing is called a short sale. Normally institutional lenders don't allow short sales to insiders (relatives or persons who have had an interest in the property) such as yourself. Furthermore, the lender would have no incentive to let you off the hook even if your brother were to qualify to refinance. You would still be obligated under the terms of the existing note.

And I assume when you say "brother file a Quit claim", what you really mean is a quit claim deed from you to your brother. That would probably trigger the due-on-sale clause of the present mortgage, giving the mortgagee cause to accelerate the loan and foreclose.