How are quitclaim and deed to secure debt different from each other if the property is unencumbered?
Full Question:
Answer:
A quit claim deed contains no warranties and the seller doesn't have liability
to the buyer for other recorded claims on the property. The purchaser takes
the property subject to existing taxes, assessments, liens, encumbrances,
covenants, conditions, restrictions, rights of way and easements of record.
However, a person who obtains a mortgage is still liable for mortgage
payments after executing a quit claim deed on the property securing the
mortgage. The quitclaim is often used among family members or from one
joint owner to the other when there is little question about existing
ownership, or just to clear the title. A written document for the transfer of
land or other real property from one person to another. A quitclaim deed
conveys only such rights as the grantor has.
A deed to secure debt is similar to a mortgage or deed of trust. A deed of
trust is a document which pledges real property to secure a loan, used
instead of a mortgage in certain states. A deed of trust involves a third party
called a trustee, usually a title insurance company or escrow company, who
acts on behalf of the lender. When you sign a deed of trust, you in effect are
giving a trustee title (ownership) of the property, but you hold the rights and
privileges to use and live in or on the property. The trustee holds the original
deed for the property until you repay the loan. When the loan is fully paid,
the trustor requests the trustee to return the title by reconveyance. If the
loan becomes delinquent the beneficiary can file a notice of default and, if the
loan is not brought current, can demand that the trustee begin foreclosure
on the property so that the beneficiary may either be paid or obtain title.
Unlike a mortgage, a deed of trust also gives the trustee the right to
foreclose on your property without taking you to court first.