Upcoming Foreclosures

Can you quit claim a property back to the bank who has the current mortgage on it?

In my line of work, I was asked this question..borrower resides in a state where it takes nearly three years to complete an actual foreclosure even if the borrower files BK..borrower is still on deed until foreclosure is complete and although have no financial obligations ...remain responsible for upkeep and nuisance laws and can actually have a warrant issued for non compliance of upkeep...customer wants to know why he cannot just quit claim the property back to the lender and file it?

Public Comments

1. Yes you can but the bank does not have to accept it.
2. Even though a person might quit claim a property to someone else the financial responsibility will remain with that person. You might tell the person that they can offer a deed-in-lieu of foreclosure to the mortgage company. There are legal procedures that would keep most mortgage companies from being able to accept a quit claim deed therefore a deed-in-lieu was established. This person might also attempt to sell the property to someone else. It is difficult to believe that it take 3 years to complete a foreclosure in any state. Lenders would definitely lose more money by not receiving anything for that long of a period. Bankruptcy could cause a property to remain in the borrower's name for long periods of time. A foreclosure once filed normally runs it's course in about 3-6 months unless the borrower file for bankruptcy protection. I hope this has been of some use to you, good luck. "FIGHT ON"
3. If I understand this, the borrower wants to give any right he has to the property on which he is not paying to the lender. He can not deed it back to the lender unless the lender was also the original seller. He can certainly have a quit-claim deed to the property drawn up with the lender as grantee, but who from the lender will sign to accept it? They may demand a full warranty deed. Actually, they do not WANT the property. They want payment for the property. If a foreclosure process is completed, the last stage of that is an auction of the property with the proceeds going to the lender. The borrower may still be held liable for any amount that does not cover.
4. in the US it wouldn't be a quit claim, it would be deed in lieu of foreclosure. Some lenders will accept it and some won't. The mortgagee should try to work something out with the lender if they want to keep the property. If not, give them the deed. It will be on the credit report, I think. You might want to get some legal advise.