What would happen to our property if my brother-in-law doesn't maintain his credit in good standing? 17 Answers as of July 08, 2013

My brother-in-law has offered to quit claim deed his home to us if we take over his mortgage (it would remain in his name). The home is free of liens and his debt is under $10k (no debt or collection problems). My concern is what would happen to our property if he doesn't maintain his credit in good standing? In that case, could a creditor place a lien on our property?

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Law Offices of George H. Shers | George H. Shers
It is not your property, title is in his name. Any lien against your brother could be imposed upon the property. You should spend a little money to avoid future problems by speaking to a real estate attorney.
Answer Applies to: California
Replied: 7/8/2013
Law Office Of Victor Waid
Law Office Of Victor Waid | Victor Waid
Yes a creditor will be able to put a lien on the property after obtaining a judgment against your brother in law and recording the judgment against the property.
Answer Applies to: California
Replied: 7/5/2013
Edward L. Armstrong, P.C. | Edward L. Armstrong
Your question is not at all clear. If your brother is quit claiming his house to you and it is clear of liens what is the reason for this? You should resubmit your question because I cannot answer it the way you have posed the question.
Answer Applies to: Missouri
Replied: 7/5/2013
Durkin Law, P.C.
Durkin Law, P.C. | Roger Durkin
YES. He cannot transfer the deed to you without a release from the mortgage holder. You could apply for a new mortgage, pay off the old one, and then your property would not be affected by the credit worthiness of the previous owner.
Answer Applies to: Massachusetts
Replied: 7/3/2013
Law Office of Jessica R. Barsotti | Jessica R. Barsotti
If he has a mortgage on the property then he will not be able to quitclaim it to you without the lienholder's approval (mortgage holder). It would make more sense for him to sell you the house and you pay off the debt.
Answer Applies to: California
Replied: 7/3/2013
    Janke Legal Consulting | Bruce C. Janke
    Check the deed of trust and promissory note to see if they include a "due on sale" clause (most do). This means that the loan becomes payable in full if the title to the home is transferred to someone other than the original borrower. So, you couldn't disclose the transaction with your brother in law to the lender and you are running the risk that if the lender finds out about the transfer, it could call the loan due in full. However, as long as the lender doesn't find out, the loan will be foreclosed only if you fail to make your payments. A lender cannot foreclose on the basis of the borrower's credit score.
    Answer Applies to: California
    Replied: 7/3/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If his name is off the deed then a creditor can not put a lien on that house.
    Answer Applies to: New York
    Replied: 7/3/2013
    Kokish & Goldmanis, P.C.
    Kokish & Goldmanis, P.C. | Bernard H. Greenberg
    If he deeds the property to you, it is no longer in his name. The only thing remaining in his name is the mortgage. However, before proceeding, check and see if the mortgage has a due on sale clause. If so, the lender can call the loan due and you would be forced to pay it off or refinance.
    Answer Applies to: Colorado
    Replied: 7/3/2013
    Law Office of Pamela Braynon | Pamela Y. Braynon
    With the property still in his name, if the property is not his homestead, then yes a creditor can place a lien on the property. If it is his homestead then no they cannot place a lien on the property. In Florida, liens cannot be placed on the property (with the exception of the mortgage).
    Answer Applies to: Florida
    Replied: 7/3/2013
    Law Office of Thomas C. Phipps | Thomas C Phipps
    Yes. A quit claim deed does not change the relationship with the mortgage company and the debtor.
    Answer Applies to: Missouri
    Replied: 7/3/2013
    Frederick & Frederick PLC | James P Frederick
    Not very likely. It would depend on the creditor and the reason for the debt, however. Most unsecured creditors cannot convert their debt to secured debt, at least not without a judgment. If your brother does not own the home any longer, then there would be no way they can lien the property, unless his transfer is deemed an attempt to defraud creditors. On your limited facts, this sounds exceedingly unlikely.
    Answer Applies to: Michigan
    Replied: 7/2/2013
    James Oberholtzer, Attorney at Law
    James Oberholtzer, Attorney at Law | James Oberholtzer
    So long as your brother in law is solvent and he is not doing this to avoid paying his creditors, you can do this. the transfer of the property to you is probably a breach of the terms of his mortgage and the lender can usually accelerate the loan and make you pay it all off at once. However, if your credit is good, you will have the property as additional collateral.
    Answer Applies to: Oregon
    Replied: 7/2/2013
    Reger Rizzo & Darnall LLP | Kathleen DeLacy
    If property is your name his creditors cannot attach it.
    Answer Applies to: Delaware
    Replied: 7/2/2013
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    Essentially all mortgages include a "due on sale" clause. If the property is transferred, the lender has the right to call the whole loan. That's your first risk. Nevertheless, you would hold the property subject to the mortgage. It's not clear why problems with his credit would subject your property to liens, unless some creditor asserted that the transfer was fraudulent.
    Answer Applies to: Oregon
    Replied: 7/2/2013
    James T. Weiner & Associates, P.C.
    James T. Weiner & Associates, P.C. | James T. Weiner
    If he quit claims the property to you subject to the mortgage. His creditors cannot reach the equity so you should be protected check with an attorney to do it right.
    Answer Applies to: Michigan
    Replied: 7/2/2013
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    How can there be a mortgage if the property is free of liens? These two statements are contradictory. A creditor can place a lien on property if it is owned by the person they creditor has a judgment against. If his name is not on the property, the lien does not attach. However, if he is transferring the property to you to avoid creditors, that transaction could be undone as a fraudulent transfer unless you paid him full value for making the transfer. Also, if title is transferred and there is a mortgage, you need to make certain that there is not a due on sale clause. Otherwise, there is a possibility the lender could call the loan due and you would have to refinance to pay them off.
    Answer Applies to: California
    Replied: 7/2/2013
    James Law Group
    James Law Group | Christine James
    Generally your brother cannot quitclaim the property if he remains on the loan and you are not added to it. There is no reason for it and it would probably be viewed as a fraudulent transfer. It is not likely to affect your assets but the risks are numerous and depend on the circumstances.
    Answer Applies to: California
    Replied: 7/2/2013
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