I signed a quit claim deed because I was on the deed but not the mortgage and now the person on the mortgage and deed isn't paying but the banks are coming after me?

Answer 1

There are several factors that must be reviewed. First, you must check to see if the deed whereby you transferred your interest was recorded in the land records. Next, was the deed recorded before the new owner executed a mortgage in their own name. If that is the case then you are not involved in the property or the mortgage and the lender must foreclose on the mortgage and take possession of the property.

However, if the property was owned by two people and only one co-owner executed a mortgage of their half interest then the bank made a grave mistake. It only has a half interest in the property. In the case of a default it would only acquire a half interest by virtue of a foreclosure.

If you executed a deed conveying your interest to the other co-owner after they executed the mortgage then the mortgagor owns a half interest that's not subject to the mortgage. However, as stated above, you need to make certain the deed of your half interest was recorded in the land records so that you are not still listed as a record owner.

If you find that you are still listed as a half owner in the land records the only correspondence you should receive from the bank is notice that it is foreclosing on your co-owner's half interest in the property. You have no obligations under that mortgage if you didn't sign it. However, you should arrange to have that deed transferring your interest recorded so the bank can identify the owner of the property.

If possible you should consult an attorney who can review the situation, check the land records and confirm that you have no obligations regarding the property.