Can you deed a house over to someone else if you still owe a mortgage on the home?

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Can you deed a house over to someone else if you still owe a mortgage on the home?

I signed my half of the deed away when ex-husband paid me my half of the money but he failed to satisfy bank loan. He says he deeded over the property to his aunt. Is that legal?

Asked on October 5, 2011 under Real Estate Law, Pennsylvania

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you own an interest in real estate encumbered by a mortgage or trust deed securing a loan, the property owner is free to transfer his or her legal interest in the property to a third person by a recorded grant deed or quitclaim deed. The new owner takes legal title subject to the mortgage or trust deed in place.

One issue is that potentially the transfer of legal title to a person who is not obligated under the mortgage or trust deed may accelerate the terms of the loan under express terms of the mortgage or trust deed under a due on sales clause making the loan due and payable immediately.

Good question.


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