Sub2 And Quitclaims In Texas
I'm confused: My atty and a very competent title professional have both told me that quitclaims aren't worth the paper they're written on. If an investor tries to convey title without notifying the mortgagee, htere is a violation of the Due On Sale clause of the mortgage contract AND if a seller wanted to challenge the quitclaims validity at a later date, it would probably be thrown out and deed restored to the original deed holder. Anyone got any better ideas on how to do a subject to openly and across the board? 
why would you want a quit claim deed on a property whose only encumbrance (after any other liens are satisfied) is the mortgage??? You would rather have a warranty deed with the caveat that you are taking subject to an existing mortgage. As far as title insurance, the title company can simply "except" the present mortgage from coverage from the title policy. Seems pretty straight forward to me.
cpifer,
You received mis-information by conventional thinking people.
1. A Quit Claim Deed is not the preferred way to transfer property in a Sub -2 deal or any deal. This type of deed only transfers an interest in the property, in essence you could have partners you didn't know about. This type of deed is normally used to correct a title that had errors or in a divorce situation where one spouse tranfrers their interest in the property.
The method of transfer is with a Warranty Deed or state specific device that offers certain guarantees concerning the property.
2. The lender has the 'option' to envoke the DOS clause, it says nowhere that it is any violation of any law to do so.
You need to find someone involved with a title compay who understands Subject To investing and an attorney who is not just guessing without doing their due diligence.
This happens all the time when the uninformed find it easier to side step the question with innuendo.
I have had real estate attorneys and one person from a well known title companiy attend my workshops, since they are familiar with the method, they have no proplem with doing Subject To deals.
As a matter of fact an executive from a nationally known title company reviewed my paperwork when I asked would you issue a title policy with this paperwork, the answer was no problem.
John $Cash$ Locke
We invest "subject 2" using Land Trust. My attn. sugested we use a quit claim to transfer rights from the previous ownwer to the land trust. This would only be transfered after a title search. Could someone explain how this would be a bad thing?
Thanks
Sire[ Edited by sire on Date 09/17/2003 ]
Now the land trust is something I do understand - doing one today as a matter of fact. Thanks guys.