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What Happens When You Quit-Claim Off Title; “Due On Sale”

What Happens When You Quit-Claim Off Title; "Due On Sale"Borrowers often ask us if they can quit-claim off title after they purchase a property.

We first remind borrowers of this: If a borrower quit-claims off title he or she is still obligated to pay the mortgage. If the person remaining on title fails to make timely mortgage payments, the quit-claiming borrower’s credit will be adversely impacted.

We also mention the “Due On Sale” clause in every promissory note.  This excerpted from an actual note: “If all or any interest in the property is sold or transferred without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument.”

I think the operative word above is “may” (I added the emphasis). I have been in the business 23 years and have seen hundreds of borrowers quit-claim and have yet to see a lender call a note due, as long as payments continue to be made in a timely manner.

I should emphasize that this is just my observation and there are probably exceptions, but I have never seen one.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167