Quitclaims and Foreclosures

mortgage default foreclosure

Can I Give a Property Back to the Bank?

With the economic downturn and fluctuating property values, I get lots of question about the legal concept of a ‘Quitclaim.’ A Quitclaim is a legal document that states you have no further claim to something, in this case a property. You are giving up all your rights. It generally doesn’t take away any liability. This blog post will discuss Quitclaims and how they work.

The typical scenario is one where the property is worth less than the current mortgage value and has what appears to be permanent negative cash flow. The questions I get revolve around property owners who have done everything they can to make the property work for them, but it just doesn’t. They can’t keep the property so they have to do something else. Foreclosure is looming. As owners start to investigate what their options are, their research brings up the notion of ‘quitting one’s claim.’

 

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