Tax Liability - Quit Claim Deed

I suggest you run as fast as possible to a different loan officer.

Since adding your father to the title, but not really, doesn't change anything that affects your taxes there are no tax implications. You might want to inquire on a board frequented by lawyers about mortgage fraud.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

When did you originally buy it, and how much did you pay for it?

It's actually a lot more complicated than you seem to think. What the loan officer apparenly is actually suggesting is to sell the place to your father for whatever the loan refinance amount is. This has implications for income taxes, gift taxes and even property taxes.

Then transferring title back to you when the refinance is completed also could cause various tax problems if the transaction is not properly documented.

But more important, the mortgage your father will get to refinance will probably have a provision that says that if there is any transfer of ownership, the lender can call the loan immediately. That will put you into even more trouble than you are in now if they do that.

If your father buys it as a trustee and holds it in trust for you, that could avoid the problems. But the lender may not go along with that.

Well, since you are actually selling the property to your father, if he pays you more than you paid, there may be income tax. If he pays you less than its market value there could be gift tax. And if the value of the property has gone up since you bought it, the property tax could be raised.

For purposes of the lender, my guess is he'd have to get 100%. This really is a potential mess. You should talk to a tax lawyer before setting this up or it could come back to bite you. You might be able to get away with this if your father buys it from you and holds title until you can afford to buy it back. Or he can sell it back to you on a land sale contract, which would entail your paying all the bills for the property. But exactly how to deal with this is not clear from the information you have given.

___ Stu

Wouldn't that make the existing mortgage immediately callable?

Those have higher rates than residential; you might not save anything even if you don't lose the property while waiting for him to get approval.

Why don't you just get him to cosign the mortgage?

Seth

under water, current FMV is about 300K with the loan at 211K.

when I will be able to regain permanent employment. Contract positions are not sufficient for refinancing purposes. My interest rate is > 5%.

the title so that he could qualify lender's income requirements and refinance probably as an investment property. I was told that there might be some 'waiting period'...I will take his name off once the refinance is completed.

It is clear that this loan officer doesn't know the purpose of a "quit claim," therefore I suggest you ignore his/her advice on everything.