Posted by Ali/IL on 8/1/08 5:00pm
Msg #258213

Wondering

Today I had a signing with two brothers.
I was told that one of them had to sign the vesting. Well, the one that had vesting has married since they bought the house together. The docs showed him as single and we are in a marital state.
What really made me wonder is that the vesting brother was on the new mortgage and rtc. He said that he was there to get removed from old mortgage.
He was told to later go to county and quit claim.
Does this make sense?

Reply by spnotaryplus on 8/1/08 6:57pm
Msg #258232

I had one closing like that and I contacted the title company about it and they e-mailed a quit claim deed right away. Not sure how it works in your state but normally lenders require that the quit claim deed be signed at the table but these are changing times and companies are bending the rules more and more. As for the RTC and vesting that is normal since he is still on title and deed. That will not change until the quit claim deed is signed. Still, it is strange that they did not prepare one with the closing docs.

I have to ask, but is IL a marital state that requires the spouse to be on the deed even if she is not on the loan? Seems I'm a little rusty and will have to pull out my 50 state title manual, clean off the dust and brush up on the information.

JMHO
Steve

Reply by jba/fl on 8/1/08 7:25pm
Msg #258234

Well now, wondering if it is homestead or investment?

Reply by PAW on 8/1/08 8:14pm
Msg #258238

Investment property wouldn't have an RTC. Illinois is not a community property state, so it is quite possible that the property may be primary residence, so eligible for RTC, but not homestead protected for spousal rights.

Reply by jba/fl on 8/1/08 8:37pm
Msg #258242

fogot about that RTC n/m

Reply by dickb/wi on 8/2/08 1:06pm
Msg #258265

a quit claim deed would NOT remove him from...

the mortgage......all it would do is say.."if i have any legal interest in this property i give it to you"....you being the grantee..........those words are not on the quit claim deed per se but that is how the courts read it......as apposed to a warranty deed.....once he has signed the mortgage he is responsible for the payments untill the bank gives a satisfaction.......owner or not........

Reply by SharonMN on 8/3/08 10:29am
Msg #258320

Re: a quit claim deed would NOT remove him from...

the mortgage......all it would do is say.."if i have any legal interest in this property i give it to you".....once he has signed the mortgage he is responsible for the payments untill the bank gives a satisfaction.......owner or not........


Obviously, this is not for us as notaries to get involved in, but I don't think you're right, DickB. If he signed the note, he would be responsible for the loan payments, but if he only signed the mortgage, he is just acknowledging the lien on the home in which he has rights.

Reply by Gerry_VT on 8/3/08 10:59am
Msg #258321

Re: a quit claim deed would NOT remove him from...

Not for notaries to get involved in, as SharonMN says, but mortgages don't obligate a person to pay, the note does that. The mortgage just says if you don't pay, the property can be foreclosed. But if you did a quit claim, you don't own the property anymore, so you don't care about the property being foreclosed. (But you might care very much about other methods that might be used to collect on the note).

Reply by PAW on 8/3/08 7:44pm
Msg #258355

"Mortgage" vs "mortgage"

I think there may be a bit of semantics in play in this thread. In general terms, a mortgage is considered to be a lien on property. However, the terms and conditions of the lien and promise to pay is stated in the Note and the collateral pledged and acknowledged in the Mortgage. (Many legal entities use a capital "M" when describing the security instrument and a capital "N" when describing the promissory obligation to pay a debt.) In some states, a Deed of Trust is used in lieu of a Mortgage, but the property is still mortgaged.

Reply by MonicaFL on 8/4/08 6:55am
Msg #258382

Re: "Mortgage" vs "mortgage"

Okay. Let me throw this one out. A person dies, the house is left to the two sons. The house has a mortgage on it. The sons have not been asked to refinance the house. Who is responsible for the mortgage?

Reply by sue_pa on 8/4/08 10:11am
Msg #258397

Re: "Mortgage" vs "mortgage"

the estate of the deceased would be responsible. Why do you think someone would 'ask' them to refinance? The loan, in all probability, is due and payable upon the death of the mortgagor and most certainly when the property transfers. "Who" would 'ask' them to refinance? Of course, many more details are needed - were their names on the deed prior to death, did they sign the mortgage? If so, it's a different set of circumstances.

As always, and certainly not knowing the circumstances of why you're asking this question, an attorney is needed (if for no other reason than to tell someone that the decedent's ducks were all in a row and an attorney is not needed) when someone passes away.

Reply by MikeC/NY on 8/4/08 7:27pm
Msg #258509

I believe you're both right, for different reasons

The mortgage secures the note. Even if the note-signer transfers his/her interest in the property, the lien remains. The remaining mortgagor (who did not sign the note) is not legally responsible for repaying the note, but the lender can still foreclose if the note defaults. What usually happens in this case is that the remaining mortgagor has to scramble to refinance in order to satisfy the lien.

So technically, you're correct - signing the mortgage just acknowledges the lien but doesn't make you responsible for the note unless you signed that as well. As a practical matter, however, DickB is also right; if you're on the mortgage - even if you're not responsible for the loan - you have to make sure the lien is satisfied. You may not have to make the payments, but if the note-signer defaults you have to make sure the loan is repaid somehow.