Lately I have received quite a few questions about using a quit claim deed to relinquish titles to property, usually turning title over to a relative, while the current owner continues to make the payments on a mortgage signed by him or her.
While this seems incredibly generous on the part of the mortgagor (the borrower) this could create a problem. The mortgagee (the lender or creditor) holds a note secured by the property that will no longer be held in title by the person who signed the loan agreement. For this reason most mortgages or trust deeds today contain alienation or acceleration clause.
An alienation or acceleration clause is language contained in the loan documentation (mortgage or deed of trust) allowing the loan to become due and payable in the event the owner sells or transfers title to the property. I.E. Title to the property cannot transfer either by sale or quit claim deed without triggering the Acceleration or Alienation Clause thus causing the loan balance to become due and payable.
If you aren’t sure about whether your loan documents contain this clause contact your lender before taking any action that transfers title to your property.