Q: If a home is in foreclosure can you quitclaim the deed for the property to someone else?
A: We suspect that your question really is whether you can transfer ownership of your home to someone else to avoid foreclosure. The short answer is that you can transfer the property, but the foreclosure process stays with the property.
Remember, when you took out the mortgage, you offered the home as collateral for the loan. Whether you own the home or not, the lender keeps the home as collateral and can pursue the remedy of foreclosure to satisfy the debt should you fail to make your payments.
You can, however, try to sell the property. When you sell it, you can pay off the amount you owe the lender from the proceeds of the sale. Sometimes, the proceeds may not be enough to pay all of the closing costs and to pay off the mortgage in full. In this situation — a short sale, you’d have to work with the lender to pay off the mortgage and have the lender agree to accept less than the full amount owed to release the lien on the home to allow the new buyer to close on the purchase.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)