There are two major problems which come with foreclosure. The first, is that you will no longer have a place to live. The second, is that it can damage your credit score immensely. Even if you are able to bounce back from the credit score, having a foreclosure on record could prevent you from getting another mortgage on a new house for several years to come. Let us explore what a quit claim deed is and how it can be used to help you during foreclosure.
You might be wondering what a quit claim deed is, well to understand what a quit claim deed is we need to first look at the different types of real estate deeds which are used to convey property from one person to another. There are 3 types of real estate deeds, namely, the quit claim deed, the general warranty deed, and the special warranty deed.
The Quit Claim Deed
The main difference between a quit claim deed and a general and special warranty deeds is the fact that the quit claim deed contains no warranty of title. The quit claim deed can be used to transfer interest/ownership in real property from buyer to seller with no guarantees. Basically it says “ I don’t know what title I have or how good it is, but whatever interest I have, I give it to you.”
The General Warranty Deed
The general warranty deed ensures that the buyer is able to legally purchase the property in question. This type of deed is set up in a way which gives the buyer warranties from the seller due to loss incurred and claims by a third party.
The Special Warranty Deed
The special warranty deed is in most part similar to the general warranty deed, however it deals with warrants the buyer against only defects which might have risen during the seller’s period of ownership.
Other Uses For Quit Claim Deeds
Due to the fact that a quit claim deed offers no warranty, it is often used to add a person’s name to a property title, transferring property among family members, as well as other specialized cases.
Quit Claim In Probate
The probate processes is a legal process in which the heirs of an estate have to go through to determine ownership. This involves going to probate court and filing the correct documentation to name an executor. A quit claim deed may be used here to transfer interest of the property to the relevant heirs.
Quit Claim In Divorce
Quit claim deeds are often used in divorce proceedings to allow for a spouse to revoke their interest in a given property, thus allowing claim of said property to go to the other spouse. It is important to note that a quit claim deed doesn’t transfer the debt of the property over to the spouse.
Quit Claim In Foreclosure
It is important to note that a quit claim deed doesn’t absolve the person executing the quit claim deed from mortgage obligations, only interest in the property. However, by relinquishing the rights to your home to the lender holding the mortgage by means of a deed in of lieu of foreclosure you are able to avoid a damaging credit score.
The quit claim deed is not a magic solution against foreclosure as it can only be used to help damage your credit rating.
Real estate law can become very daunting when you consider that every State has different legal rules regarding the process. However, this doesn’t have to be the case, as there are specialized attorneys who can help you throughout the process. At Gary I. Handin, P.A. we offer a wide variety of legal services including foreclosure defense in Florida which deals specifically with Florida law. With our legal expertise we can ensure peace of mind.