Legal Question in Real Estate Law in California
My brother and I are on title of the house. My brother was added in order to qualify for the loan. I'm the one who makes the mortgage payments. Now we're doing a quit claim deed to remove him from the title on the house. Would we meet one of the exceptions for the transactions under the documentary transfer tax and if so which one? Thanks for your help.
2 Answers from Attorneys
No. You will also be reassessed for property tax purposes, although in this market that's probably not an issue. You should bear in mind, however, that what you are doing may trigger a due on sale or transfer clause in your mortgage, requiring immediate payment in full.
I agree with Mr. McCormick. I would also point out that what you are doing may be considered loan fraud, if you are supplying applications for the loan that indicate your brother is going to occupy the property, and then plan on switching that around, or contain other misleading statements in an effort to induce this lender to make a loan.
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