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Julieann, Other/Just Looking in Los Angeles, CA

My husband and I are in the process of refinancing our house in California. It should be noted that we

Asked by Julieann, Los Angeles, CA Sat Jan 31, 2009

Our rebroker advised that the loan be obtained in my husband's name only to ensure a better interest rate since his credit rating is higher and were assured that my interest in the house would remain but that I would have no personal obligation for the mortgage. However, now that we're actually in escrow, we found out that I must sign what appears to be a quitclaim deed, giving up my rights to the title of the house, including any community property rights. Needless to say, we're both flabbergasted, but are reluctant to lose out since we're locked in at an incredibly low rate. (This psychologically hurts even more since I paid for original down payment and MY parents gave us a Christmas gift of money to cover closing costs now.) IF we go ahead with this and I sign the quitclaim, can my husband put me back on the title after the refinance without the loan being accelerated? AND what about federal gift tax?

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including any community property rights. ..Wrong! Ever been in divorce Court - No Way! Its not grounds to accelerate anyway.
0 votes Thank Flag Link Sun Feb 1, 2009
Hello Julieann,

Here is what I advise (I must say that I'm not an attorney or CPA). See if your husband can do a quick claim deed after the loan closes back to you after the loan records.Contact your lender about this and or escrow. The next thing you might want to do is speak to a Real Estate attorney. Since you contributed to the down payment (if you were married at that time) then this quick claim deed might not stand up in court as you contributed to the property and California is a community property state. Many times, pre-nups don't even stand up in court, so check with an attorney. You are luck you got a loan in this voltile market. I think your smart to stick with it but I know it's painful not owning part of a house you have contributed to but chances are good that if you check with an attorney they may advise you that it would be difficult to say the house isn't half yours. Your best bet though is to see if you can do a quick claim adding you if it closes.

All the best,

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
0 votes Thank Flag Link Sun Feb 1, 2009
Julieann, at a minimum, I would suggest that you speak with the Title Rep to determine how to best handle this.

The following is a mix of advice and opinion. First, the advice: contact a Real Estate Lawyer for legal advice to answer the legal aspects of your question, and a tax advisor regarding your tax questions. It’s really a bad idea to be getting legal/tax advice from anyone who is not a law/tax professional.

Second, if you are going to be removed you might consider an interspousal transfer grant deed. My understanding of an interspousal transfer grant deed is to easily transfer real property between spouses so the property is not reassessed for tax purposes, and/or you need to transfer interests in the property, and/or convert “community property” into separate property (California is a Community Property state).

Once, escrow has closed, you can again change title to add you. In fact, you might want to sign the deed that adds you when you sign the loan paperwork with instructions to record the refinance docs first, and then the deed to add you back.

Best, Steve
0 votes Thank Flag Link Sat Jan 31, 2009
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