When someone purchases a home, a rental property or a vacation property, a quit claim deed is signed at that time transferring his or her interest in the real estate to another person. The document is then recorded with the county in which the property was purchased showing the new titled owner of the real estate.
Quit claim deeds are signed when a divorce involves real estate. The new quit claim deed transfers the interest of one spouse to the other spouse if they refinance the mortgage into one spouse’s name, if they sell the real estate to another person or if there is no mortgage.
Signing a quit claim deed does not take a person off a mortgage. A person’s name is removed from a mortgage if the mortgage is refinanced into the name of another person or the mortgage is paid off in full. Signing a mortgage is an independent contract with a bank or lender requiring repayment of the mortgage.
A quit claim deed and a mortgage are two different and separate procedures and they serve their own separate purpose. A person who signs a quit claim deed removing his or her name from a quit claim deed and whose name is still on the mortgage has now allowed that ex-spouse to have full titled ownership in the house but they are both responsible for the mortgage. This can be a very bad result in a divorce.
A soon-to-be-ex-spouse who is being asked to sign a quit claim deed needs to give serious consideration to talking with an experienced family law attorney to determine if doing so is in that person’s best interests.