What can bank do with quit-claim deed?

[Mark5739]

What is the name of your state (only U.S. law)? IL
Hello, my mom, dad, and aunt has owned a home for about 30 years. My dad has been out the picture for about 8 years. My mom and aunt recently (March 2010) received a loan modification during which all the bank wanted was a divorce decree in the adsence of my fathers signature. Now we have a message that the bank wants a quit-claim deed from my dad and we don't know where my dad is. Why would a bank be concerned with getting a quit-claim deed in their hands? I heard that a quit-claim deed gives a bank the right to ask for all the money right away but a lawyer for students at my university told me that law doesn't apply to divorced couples.

[justalayman]

I heard that a quit-claim deed gives a bank the right to ask for all the money right away but a lawyer for students at my university told me that law doesn't apply to divorced couples

I presume you are speaking of a "due on sale" clause or an acceleration clause. The lawyer told you correctly. It would not apply in this situation.

Now we have a message that the bank wants a quit-claim deed from my dad and we don't know where my dad is.

If your father is still on the title, of course the bank would want him to either relinquish any claims to the house (I don't know why he would agree to it though) or to sign the mortgage accepting the lenders rights in case of a foreclosure.

that is just how it works.

If you cannot find your dad, there really isn't a lot you can do.

[Mark5739]

Thanks, Yes that's what I was talking about, I just didn't know the correct words. Alright, thanks. I guess they just want to cover themselves in-case something goes wrong.

[Mark5739]

Hi My next question is can a bank complete a loan modification without the quit-claim deed? They went about it in such a strange and unprofessional way, it's hard for me to trust them now. So in March they sent in the loan modification forms and they believed they had received a loan modification. Now all of a sudden in early May they call them up giving them 2 days notice that a quit-claim deed must be in or the loan modification is null and void. My mother was out of town at the time. First they say the loan modification will not go through without a quit-claim deed (Why they wait so late tell them? The bank says they didn't know one was needed. What???)

I ask what will happen if a quit-claim deed is not in by the short deadline. She tells me a decision will be made. That sounds like a lie because if they were claiming they could not put it through without the quit-claim deed then how can they still have the option of making a decision on the LM? If what they was claiming was true they would not have an option of making a decision on it, it would just be null and void, instantly, with no chance of making a decision. The bank lady tries to twist it around saying it's really not strange. No if I say it's strange it's strange ma'am, nobody gives short notices on big things like that. Who does that?

So we tried to get the village department to help us fill out the papers and they told us a lawyer would have to help us. They also told us money must be payed. I told the bank yesterday to make a decision or whatever because my auntie doesn't have the money right now (Last week the village told us that the procedure would cost nothing, this week we went to do it and they said Oh this is what you are doing? Yes you do need money (We had told them twice what we were doing.). My auntie spent the money because we were given wrong information that it would cost nothing. Can they mislead us like that? Of course we have no proof that they told us it would cost nothing.). I heard this morning they told my auntie that a decision was made yesterday and the building was put in foreclosure yesterday. They say when my auntie gets the money to get the quit-claim deed completed they will take the building out of foreclosure.

I heard it cost the bank a whole lot of money to start a foreclosure. Why would they do that if they no they are going to stop when they get a quit-claim deed? Are they lying? They had the Loan Modification papers since March, is all this stuff legal they are doing? We thought the loan modification was complete, we already started making payments according to it. Also, is there a senior citizen exemption from fees to get a quit claim deed processed?

Thanks,
Mark

[Mark5739]

Also is it legal to tell somebody their house is in foreclosure when it really is not yet?

Thanks

[Mark5739]

I presume you are speaking of a "due on sale" clause or an acceleration clause. The lawyer told you correctly. It would not apply in this situation.

If your father is still on the title, of course the bank would want him to either relinquish any claims to the house (I don't know why he would agree to it though) or to sign the mortgage accepting the lenders rights in case of a foreclosure.

that is just how it works.

If you cannot find your dad, there really isn't a lot you can do.

Where can I look up this Illinois law that prevents the bank from immediately demanding total payment from an ex-wife after they get the quitclaim deed?

Thank You,
Mark

[justalayman]

I can't remember what it is called but I believe it is a federal rule. There is a guy that posts here (can't remember his name either) that has mentioned it several times. As I said, it seems like it was a federal rule that he keeps mentioning.

[nextwife]

Where can I look up this Illinois law that prevents the bank from immediately demanding total payment from an ex-wife after they get the quitclaim deed?

Thank You,
Mark

Banks don't exercise a Due on Transfer when one spouse who is already an owner, and on the mortgage, takes full title to the property (on a CURRENT mtg).

[Mark5739]

Does anybody know where I can look this preventive law up?

[Mark5739]

Oh Justlayman, I never saw your post, thanks anyway.

[justalayman]

try this:

[url=http://www.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00001701---j003-.html]United States Code: Title 12,1701j–3. Preemption of due-on-sale prohibitions | LII / Legal Information Institute[/url]

or search for the Garn-St. Germaine Act

[Mark5739]

Thanks


I was told today that we can't complain about this situation because the bank is doing us a favor. Is that true? My understanding was that if you qualify for a making homes affordable loan then the bank has no choice but to give you one.

[HomeGuru]

What is the name of your state (only U.S. law)? IL
Hello, my mom, dad, and aunt has owned a home for about 30 years. My dad has been out the picture for about 8 years. My mom and aunt recently (March 2010) received a loan modification during which all the bank wanted was a divorce decree in the adsence of my fathers signature. Now we have a message that the bank wants a quit-claim deed from my dad and we don't know where my dad is. Why would a bank be concerned with getting a quit-claim deed in their hands? I heard that a quit-claim deed gives a bank the right to ask for all the money right away but a lawyer for students at my university told me that law doesn't apply to divorced couples.

**A: what you heard and what the lawyer told you are not true.
The lender would need all title holders to sign the loan mod docs and that is why they are asking for Dad to come off the title. If Dad is on the original mortgage, the lender does not recognize divorces with respect to mortgage loan liability.

[Mark5739]

Thanks, somebody had told me that a while back and nobody corrected this person so I thought it was true. And the lawyer I talked to didn't totally explain that such a law didn't even exist in the first place.

And as for my concern today I just heard that when the bank approves a loan modification it is really the best thing for themselves. Typical. In other words the favor is for themselves. Thanks