[rkahler]

My daughter's ex-spouse, as a stipulation in their marital settlement agreement, signed a quit claim deed which is being held in trust by her attorney. I, her father, have been paying the first and second mortgage payments in full for the last six months. She is not able to make the mortgage payments.

Can she transfer the deed to me? Will I be able to deduct the interest on my tax return? How does such a deed transfer affect the mortgage company? Can I assume the mortgage in my name?

Thank you,

Robert Kahler

[excon]

Hello rk:

No, the bank isn't going to like that. If the mortgage is assumable (doubtful), then you can. Otherwise, no! The best way to do this is for her to sell you the house and you get your own mortgage.

excon

[ScottGem]

Talk to her attorney. Why is the deed being held in trust? Has it been registered? The bank may not like the idea of it being transferred and getting the ex's name off and they may call the loan (which could be why its being held in trust).

I agree with excon, your best course of action is to buy the house from your daughter obtaining your own financing, then rent it to her or sell it back on a contract to buy basis.

You will not be able to deduct the mortgage interest since it wouldn't be your primary residence. You would, however, be able to deduct it as an expense against the rental income.