Quit Claim or Quiet Title

[genmadriz99]

Please help!Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants. I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax. Therefore, I am seeking a quiet title action. What is the best way to approach this issue? We do have a daughter together, but she's a minor.

 

[Just Blue]

Please help!Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants. I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax. Therefore, I am seeking a quiet title action. What is the best way to approach this issue? We do have a daughter together, but she's a minor.

What state?

 

[quincy]

Please help!Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants. I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax. Therefore, I am seeking a quiet title action. What is the best way to approach this issue? We do have a daughter together, but she's a minor.

He will still be held responsible for the mortgage - so why would he quitclaim his interest in the property to you? He would be smart to speak to an attorney before doing anything foolish.

 

[Taxing Matters]

Please help!Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants. I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax. Therefore, I am seeking a quiet title action. What is the best way to approach this issue? We do have a daughter together, but she's a minor.

You need not worry about him owing any federal gift tax unless (1) this home is a mansion, (2) he's already made millions of dollars in taxable gifts during his lifetime, or (3) he is a non resident alien as defined by the Internal Revenue Code (IRC). If none of those three conditions apply, he'd simply be required to file a federal gift tax return and reduce his unified credit, which is the amount of gifts he can make before he becomes subject to gift tax.

This is not a quiet title situation. There seems to be no genuine dispute as to ownership here.

The problem I foresee is that the gift/transfer may trigger the mortgage due on sale clause which would require paying off the remainder of the loan immediately. Solving that generally would mean you'd refinance the property in a loan in your name and you'd pay the mortgage going forward.

 

[adjusterjack]

Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants.

How will you pay him for his share of the equity that has built up over the last few years?

 

[Zigner]

At its heart, this is a (misguided) question about tax evasion. It's merely a coincidence that tax wouldn't be owed in the first place.

 

[zddoodah]

What state?

Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants.

May not be relevant, but how was this situation able to happen?

I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax.

The only reason you could possibly fear this is (likely) because you are completely ignorant about gift tax laws.

Therefore, I am seeking a quiet title action.

Huh? On what basis?

What is the best way to approach this issue?

You haven't made it clear what legal issue may exist. However, if you're contemplating litigation (especially a baseless and unnecessary quiet title action), consulting with an attorney is the only advisable course of action.

 

[Litigator22]

Please help! Ex-boyfriend is solely on mortgage, but we are both on title as joint tenants. (?) I'm afraid that if he quitclaims his half to me, he will owe an enormous amount of gift tax. Therefore, I am seeking a quiet title action. (?) What is the best way to approach this issue? We do have a daughter together, but she's a minor.

Excuse me, but it would be most unusual for you to on the title to the home but not on the mortgage note. That could only occur if your ownership interest became vested subsequent to the recording date of the mortgage. And then it would be subordinate to and secondary to the mortgage lien. Meaning that in the event of foreclosure of that lien your ownership interest would literally evaporate.

To explain - mortgage lenders DO NOT make loans secured by a mortgage on property short of all the then existing owners of record being signatory to and thus bound by the terms of the mortgage agreement/note! Not if they expect to remain in business! Why? Because otherwise their security in the property would be essentially worthless.

Concerning your quest for a quiet title action. Just whose interest and/or claims to the property is it that you seek to quiet? Who and/or what is claiming an interest in the home adverse to your interest? So far you have indicated nothing other than that of a mortgage holder and you certainly are not going to make that go away in a quiet title action or by means of any other judicial process!

 

[quincy]

Did your ex-boyfriend purchase the home/secure a mortgage prior to the two of you meeting and having a child together? Did he add you to the deed on a home he already owned, in other words?

 

[LdiJ]

Excuse me, but it would be most unusual for you to on the title to the home but not on the mortgage note. That could only occur if your ownership interest became vested subsequent to the recording date of the mortgage. And then it would be subordinate to and secondary to the mortgage lien. Meaning that in the event of foreclosure of that lien your ownership interest would literally evaporate.

To explain - mortgage lenders DO NOT make loans secured by a mortgage on property short of all the then existing owners of record being signatory to and thus bound by the terms of the mortgage agreement/note! Not if they expect to remain in business! Why? Because otherwise their security in the property would be essentially worthless.

Concerning your quest for a quiet title action. Just whose interest and/or claims to the property is it that you seek to quiet? Who and/or what is claiming an interest in the home adverse to your interest? So far you have indicated nothing other than that of a mortgage holder and you certainly are not going to make that go away in a quiet title action or by means of any other judicial process!

Actually, it does sometimes happen. I had always been of the same opinion that you expressed here, until someone else proved me wrong.

 

[paddywakk]

Excuse me, but it would be most unusual for you to on the title to the home but not on the mortgage note. That could only occur if your ownership interest became vested subsequent to the recording date of the mortgage. And then it would be subordinate to and secondary to the mortgage lien. Meaning that in the event of foreclosure of that lien your ownership interest would literally evaporate.

To explain - mortgage lenders DO NOT make loans secured by a mortgage on property short of all the then existing owners of record being signatory to and thus bound by the terms of the mortgage agreement/note! Not if they expect to remain in business! Why? Because otherwise their security in the property would be essentially worthless.

Concerning your quest for a quiet title action. Just whose interest and/or claims to the property is it that you seek to quiet? Who and/or what is claiming an interest in the home adverse to your interest? So far you have indicated nothing other than that of a mortgage holder and you certainly are not going to make that go away in a quiet title action or by means of any other judicial process!

Actually, they do. My youngest son is on the title, but only his ex-wife is on the mortgage. The home was financed that way from the get-go. It may be unusual, but it can happen.

 

[LdiJ]

Actually, they do. My youngest son is on the title, but only his ex-wife is on the mortgage. The home was financed that way from the get-go. It may be unusual, but it can happen.

I also think that state law figures into the equation to some extent, if I remember correctly.

 

[quincy]

I also think that state law figures into the equation to some extent, if I remember correctly.

More than state law - which potentially could play a role - is the mortgage lender. Some lenders require that all of those on the deed also be included on the loan documents.

 

[Litigator22]

Actually, they do. My youngest son is on the title, but only his ex-wife is on the mortgage. The home was financed that way from the get-go. It may be unusual, but it can happen.

Dear paddy and Q:

Please allow me to illustrate my point with a hypothetical.

Let us assume that you own say Lot 1, Block 2 of Morning Glory Subdivision. Through an inheritance bachelor brothers, Bob and Ray are equal undivided co-owners of adjoining Lot 2.

There are no existing improvements on Lot 2. You are desirous of acquiring Lot 2 for the purpose of extending existing improvements on Lot 1.

Ray is desperate for cash and is willing to sell his deeded ownership interest in lot 2 for say $5k. Obstinate Big Bucks Bob, at odds with indigent Ray, won't sell at any price.

QUESTION: Would you be willing to pay Ray his asking price in exchange for a deed covering his equal undivided one-half interest in lot 2?

OF COURSE NOT! Not if you were in you right mind.

You'd become bedfellows with big bucks (co-tenants/owners) and unable to make any improvements to lot 2 without his consent. Plus, you'd have to share those improvements with him and his cronies.

Or, in the alternative, go through the time consuming, paper eating, attorney enriching process of an equitable action of Partition of Real Property.

Which would be the same unfortunate position of a "foreclosing" mortgage lender that foolishly loaned the $5k to Ray without securing co-owner, Bob 's signature to the mortgage documents. .

In other words, an institutional lender would never grant a loan secured by a lien on real property unless:

(1) All then existing record owners are signatory to the mortgage agreement and note. Or,

(2) Those owners of record not on the mortgage documents have somehow subordinated all of their right, title and interest in the property (including waiving rights of homestead) to those of the mortgagee.

 

[quincy]

Dear paddy and Q:

Please allow me to illustrate my point with a hypothetical.

Let us assume that you own say Lot 1, Block 2 of Morning Glory Subdivision. Through an inheritance bachelor brothers, Bob and Ray are equal undivided co-owners of adjoining Lot 2.

There are no existing improvements on Lot 2. You are desirous of acquiring Lot 2 for the purpose of extending existing improvements on Lot 1.

Ray is desperate for cash and is willing to sell his deeded ownership interest in lot 2 for say $5k. Obstinate Big Bucks Bob, at odds with indigent Ray, won't sell at any price.

QUESTION: Would you be willing to pay Ray his asking price in exchange for a deed covering his equal undivided one-half interest in lot 2?

OF COURSE NOT! Not if you were in you right mind.

You'd become bedfellows with big bucks (co-tenants/owners) and unable to make any improvements to lot 2 without his consent. Plus, you'd have to share those improvements with him and his cronies.

Or, in the alternative, go through the time consuming, paper eating, attorney enriching process of an equitable action of Partition of Real Property.

Which would be the same unfortunate position of a "foreclosing" mortgage lender that foolishly loaned the $5k to Ray without securing co-owner, Bob 's signature to the mortgage documents. .

In other words, an institutional lender would never grant a loan secured by a lien on real property unless:

(1) All then existing record owners are signatory to the mortgage agreement and note. Or,

(2) Those owners of record not on the mortgage documents have somehow subordinated all of their right, title and interest in the property (including waiving rights of homestead) to those of the mortgagee.

Quite frankly, if I owned Lot 1 Block 2 in Morning Glory subdivision, I would consider selling my Lot 1 property to Indigent Ray and Obstinate Big Bucks Bob. For big bucks.

I can sense already that Obstinate Bob will in the future be a problematic, unpleasant neighbor.