Am I in trouble if the property my HELOC was for is not in my name and is now in default?
Well if by “trouble” you mean a foreclosure soon to be filed against you…then “Yes” is the answer. How exactly did the property get “out of your name” without a sale? If an actual sale took place the HELOC would have been paid off by the sale…and you’d be off the hook.
If you just signed a “Quit Claim Deed” over to someone giving your ownership rights to them without a formal sale and left mortgage(s) you’re responsible for still on the property…then you made a big mistake.
For one thing, there are “Due on Sale” clauses in every mortgage and HELOC which states if you sell OR transfer your ownership, the bank as the right to call their loan due and payable immediately. If you don’t have the money… they have the right to foreclose.
Secondly, as you have found out, leaving “others” to pay your mortgage obligations rarely works out. They never pay or pay late and your credit is ruined…or worse…the loan(s) go into default and you get a foreclosure on your record.
To solve this, get your ownership rights back the same way to gave them away…with a “Quit Claim Deed”…and start paying the mortgage on time…get it out of default. If you can’t afford the mortgage, then after you have your property rights back…sell the home and pay off the mortgage.
Good Luck
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Tags: Due on Sale • HELOC • Quit Claim Deed
My husband and I are married and recently bought a home. The lender said my name could not be on the mortgage due to my poor credit so it is only in my husband’s name. The lender said it was only a formality and after closing we should re-record the quit claim deed from separating community property to establishing community property. Does this protect me in the event something happened to my husband? Somehow I get the feeling I made a big mistake. Please help!
Tracie,
First, let me say you need to get a real legal opinion from an attorney to be sure. We are not lawyers. With that said, if your husband quit claimed you back on to the title, you are some what protected. That gives you back an undivided 50% most likely. But if he were to die, his 50% might be contested. To be sure you’d get 100% title interest in the home, he’d have to will you his half of the property.
As I said earlier….get a real legal opinion…as this is not one to bank on…
Thanks…