What is the name of your state (only U.S. law)? Maryland
A man owns real property with clear title tenants by entirety, no mortgage, owes nothing on the property. The man marries but does not add his wife's name to property title. The man executes a quit claim deed giving his rights to the property to his children of a previous marriage and leaving his current wife a life estate in the property. The wife is not aware of the quit claim deed. The man and wife secure a loan against the property as co-borrowers. My question is, has this loan been taken out legally since the man has no rights in the property and the wife is not a joint nor in common owner?
Not meaning to be overly inquisitive, but in prologue may I ask some questions like how you fit into these bizarre doings? What prompts your question? Are you one of the grantees in the QCD?
If a grantee, are you concerned that the grant may be inferior to the mortgage?
By what means was the life estate supposedly granted?
What pertinent documents have you read? Which if any have been recorded and in what order?
How do you know that the spouse is unaware of the QCD? (Not that it has any pertinence.)
Is the husband still “subcelestial” or passed over?
Why the use of the conjunctive in your telling
that the man quitclaimed the property to his kids and “leaving” his current wife a life estate in the property?
There is some ambiguity there, which you may not recognize, but nevertheless if makes your post subject to different interpretations.
1. If the QCD to the children reserved a life estate vested in any third person, it would be both paradoxical and legally ineffective.
2. Your use of the present participle of the verb “
leave” could be reasonably understood as the man made a will “
leaving” his wife a life estate. Which such devise, should she enter widowhood, would lapse because of the QCD – either recorded or unrecorded.
If the husband actually deeded her a life estate and the document was placed of record subsequent in time to that of the QCD, then it is a “
stray” or “
interloping deed” and conveys nothing because he owned nothing to transfer.
(Not to mention that it would be unusual and not a desirable practice for the husband to grant his wife a life estate in his non-marital property by an inter vivos instrument.)
The legality of the “mortgage loan” is not in point. The point is whether or not the mortgage transaction resulted in the lender receiving a
first-in-line security interest in the property.
If the QCD was placed of record prior to the recording of the mortgage, OR the lender had notice of its existence, then the lender has no security in the property whatsoever.
Plus, there are always strange legal entanglements in any inter-spousal conveyance of an interest in real property,
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Truthfully it is an interesting scenario and might rattle some heads if it appeared on a bar examination
