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The only way to get the properties off of your credit would to get the current loans off the property. You have 3 options: 1. You mother would need to buy the properties from you. For this to work, she could not be on title in the past and she would need to qualify for the new loan. You could also sell it to another family member. You can use a Gift of Equity to take care of the downpayment if the situation is right.
If your mother is on title, there might be a way to refinance with just your mother on the loan. She would have to qualify for the new loan.
Sell the property. The bottom line is that I do not know of any lenders that will remove a person from the Note. I have tried to do this before and it doesn’t work. If you are on the loan, then the payments, or lack thereof, will report to the credit bureaus.
A Quit Claim will only remove you from the property, but not from the Note. Do not sign one of those. If the bank does forecloses or you sell and if there is equity, then you might be able to get some of the equity if you are still on title. Good luck.
It is the NOTE that dictates how credit is being reported, not the TITLE. You have several choices available. You could make payments yourself on one or both of them and try to sell the properties. If your mother lives in one of the houses and is age 62 or older, she may qualify for a Reverse Mortgage, which does not require any payments. [You would have to take yourself off the title in that instance.] You could sit down with your mother to work out a budget to see what she really CAN afford to pay each month. That way you could factor in the rents [assuming there are tenants in there that pay on time] and allocate those funds directly to satisfying the monthly payments.
Whenever someone co-signs on a loan, that puts the co-signer’s credit at risk. You should inquire of the lender[s] to find out about the status and the payment history as soon as possible. Having late payments on your history could result in increased credit card account rates, for example. Since you purchased these two properties fairly recently, you should not expect to sell them at a price that will recoup your investment if you use a real estate agent. But, this sounds like an option that should be entertained.
Unfortunately you only have a few options right now. If you change the title in any way, ie quit claim, then you have violated the original note and the lender can immediately call the note due. If your credit was used then it means that you are also obligated to the debt ,if you try to remove yourself without the approval of the lender then you are in breach of contract. Banks are VERY scared of loosing more money right now so they are watching potential defaults more closely.
If your mother is already late on her payments your account has been flagged internally for potential foreclosure. Banks also regularly check tax roles and do title searches on their mortgages to make sure that nothing has changed in the title that would increase their exposure to risk. When the lender is notified that the title has changed without their pre-authorization then they will call the note due immediately. If the debt is not paid then it will go into foreclosure and the lender will sue you for the full amount, and ruin your credit in the process.
Option one is for you to make payments until you can sell. Option two is refinance the property out of her name and solely into yours. Option three is make payments just to keep you out of foreclosure and try to sell, this option will ruin your credit in the process. All of the above options include a phone call to the lender and tell them your situation and hear what their thoughts are. I know that this is not what you wanted to hear, but there are no other ways around it at this time. I have had two separate clients in the last two months that performed a quit claim and the lender called the note due in 30 days. Fortunately they were able to sell one and the other refinanced before the foreclosure took place.
Can they be rented out to satisfy the mortgage payments? If they can’t than you will need to sell before they fall behind and destroying your credit.
The only way to save your credit other than the obvious (selling) is for your mother to purhcase these homes via a new loan(s) to pay off “your” loans. You can transfer all your rights to the properties to your mom, your cat, your dog (making light of the situation). But you will continue to remain on the loan. Make sense? I don’t care if you “Quit Claim' your rights, or use a Warranty Deed, your name, your credit will suffer because it is only your social security number that was used, make sense?
You might consider transferring all rights to the properties (and you knew this) to her via a Quit Claim or Warranty Deed, wait twelve months then have her refinance, but if she’s currently having trouble making the payments this might pose a challenge.
Ideally (in a perfect world) it would be great to transfer your rights, rent them out and have the tenants make you payments, wait twelve months, then refinance. Hope this helps.
You didn’t indicate if your mother is also on the mortgage documents but it really doesn’t matter. When you signed the mortgage documents YOU promised to pay the payments. You are completely responsible for the liabilities.
Transfering the properties to her (or anyone else) will not help. The mortgages will still be in your name and you will be responsible for them. If you transfer the properties to anyone else, then they will then own the property and you will still be liable for the mortgages.
Transfering the property without paying off the mortgages may also trigger the “Due On Sale” clause and you will be required to pay off the mortgages.
If your mother is not on title and the mortgages with you, you must sell the properties and pay off the existing mortgages to be removed from the liabilities.
If your mother is on title, you must sign your interest in the properties to her and she must refinance the mortgages in her name alone.
There is no such thing as just using my credit, you are a normal owner, you’re just considered a non-occupying owner if you don’t live there…
A Quit claim and such will get you off of the title, not the loan or off of your credit. She would have to qualify and refinance the loans in her name only but from what you’re I’m reading, that doesn’t seem to be an option if she’s having trouble paying it and she needed you to begin with.
You may want to talk to a loan modification company and see if there is something they can do for you, they may be able to modify the loan so she CAN afford it.
I bought two properties about a year or less ago. The only purpose i served in the transaction was the use of my credit. My mother has been making payments on the two properties until now, but she cannot afford to continue paying them. How can i transfer these properties to her so it does not ruin my credit. Does a Quit Claim or Warranty Deed apply?