how does quitclaim stop foreclosure?

Question by michelle s: how does quitclaim stop foreclosure?

Best answer:

Answer by stopccdebt
This is a voluntary foreclosure. It means that you relinquish all rights to ownership of that property. The only real advantage is that it can reduce some legal costs that you would still owe.

The impact on your credit would still be quite severe. The best move would be to sell the property yourself and avoid foreclosure altogether. This is preferred, if it works out that way. This is not the easiest thing to do, but it is worth it if you can regain enough money to pay the loan balance in full and prevent foreclosure.

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2 Comments/Reviews

  • Pat F says:

    I think yuo may be asking about a Deed in Lieu of foreclosure. This is an option the lender may be able to offer to you under certain conditions:

    1) The foreclosing mortgage must be the only lien against the property
    2) You can’t be able to financially make the mortgage payments (decrease or loss of pay, hardship still continuing, etc)
    3) Some lenders require that the house have a certain loan-to-value ratio before accepting a deed in lieu

    If your lender does accetp a deed in lieu, then you will be released form the obligations of the mortgage and you’ll be required to move. You’ll still have the late payments on tyour credit and in some cases, the lender will report the mortgage as a charge off – a negative hit on the credit, but not as bad as foreclosure.

    If you need more info on foreclosure, check out our site:

  • Rosalia F says:

    This is a tricky question, quitclaim, in itself, does not stop anything. What typically happens is that someone will say, sign a quitclaim and I will make sure you don’t go into foreclosure. They make up the back payments and pay your mortgage, just as if it were you. However, you are still liable for those payments, really you are. The bank has what is known as an acceleration clause in your contract which states that if you try to assign your property to someone else the full amount is due immediately, unless you go to the lender and qualify the new owner of the property for the loan, which often is not possible because otherwise they would have done that in the first place. So if the person you signed the quit claim deed to ever defaults on the loan, guess who the lender will come after for payment, you, you, you. I have been in real estate for over 15 years and this is what typically happens. Also, if the person getting the quit claim is familiar with real estate they will try to sell the house quickly at a profit or they may decide to have it as a rental and rake in the money until the market goes up then sell the house, you could do that too. Now, if you ever try to get another house, the records will show that you still own this one and you won’t be able to get financing. Go to a legitimate agency and ask the broker of that agency what your best plan should be.

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