Quitclaim
I am not sure if I am in the right forum, but I need help. I am trying to help my brother out. he filed bk, he still owns his home, he is trying to refi, but his interest is going to go high. Someone suggested that he can have someone whom he trusted help him out. We thought about him selling the house to me as an investor (which i am not sure if thats going to be more than 5% down because I am not working right now) and then after he gets his money , for me to quitclaim it back to him. But I also heard from someone else that when I quitclaim it back to him that the house was going back to him but the lien would remain under my name? Is this true?. Can someone help me understand this? , Thanks in advance. 
Yes, I believe you have heard right. The mortgage stays in your name unless your brother can assume it (he probably would have to qualify for it) or prequalify for a new one. The mortgage always stays on the property even if it transfers title. Also, not sure about a quick claim deed, but transfers in title may trigger the due on sale clause in the mortgage.
When you use a Quit Claim Deed, then you are giving up all your interests in the property. The most common use for a QCD by a married couple that is going through a divorce. Usually the husband QCD the property to the wife, meaning he is giving up all his interest in the property to her and the loan stays in place.
So, for your scenario, then yes the mortgage would stay in your name if you QCD the property back to your brother. You can also have your brother QCD the property to you and then you can refinance with a loan in your name at a lower interest rate. But, I don't know if I would QCD the property back to my brother, knowing he just filed BK. You might want to consider doing a contract for deed, in which your brother would have to fulfill the terms of the contract before he can get the deed to the property. In the contract for deed you can make the stipulation for your brother to get a loan in his name, then he can claim the deed. Whatever you decide, make sure you get everything down on paper and record it at the courthouse. You should also consult with a real estate attorney.
Tanya[ Edited by tanya1215 on Date 02/21/2004 ]
Thank you guys,
Tanya1215 but if I keep it under my name and then refinance, Don't I have to be working, isn't this a requirement?
Dont do any deal you cannot support yourself. Dont get caught in a "straw purchase" either.
You should have some type of monthly income coming in if you are going to refinance, yes. If you have a very low LTV (i.e. 50% or less), then you can refinance without proving any income. I suggested a possible solution to post with the assumption that you can make the monthly payment if your brother doesn't.
I agree with WheelerDealer, do not go into a deal if you don't have the capital to keep up with the payments. There are other ways of investing in RE and making money without needing a lot of money, like flipping or wholesaling.
Tanya
actually not.
Don't mess with contract for deeds. The abuse of them thru the years has led to changes in the laws in most states.
Re Quitclaim deeds, they don't even use them in divorce cases any longer. These are the least binding of all deeds. Title companies will not issue insurance policies for them. They now use special warranty deeds.
Don't use a quitclaim in this case. Furthermore the deed and the deed of trust (mortgage) ARE two totally seperate things
if I were you I would seek a good attorney!
Thank you guys again, I don't think It'll be happening anyways, I just thought maybe I could of help him in some way because he needed some cash, but after us talking it over, he decided not to do anything with his property for right now and, my other brother is going to lend him money in the meantime.
victory2004
Why don't you work as birddog for a while and help him go out of the debth. He'll pay back to you later plus you can learn the CREI buy finding properties for investors.
I am very new in this whole business of Real Estate, I am interested in investing but, I still need to know so many things, I am hoping I can get the information necessary from here to start. And in regards to my brother he already paid the debt, he had to sell one of his properties, but the one he lives in, thats the one he was trying to refi, But, Thank God we found a better solution for the moment, that involves my other brother.
victory2004,
It looks like you'll be fine.