Q: I have a 30-year old daughter. About one year ago, she purchased a mobile home with a friend. They both signed the mortgage. Just recently her friend decided to move out. My daughter is not sure what she needs to do to remove her friend’s name from this mortgage. Would a quit claim deed take care of this?
A: Absolutely not. Don’t have your daughter quit claim anything to the friend. Her friend could quit claim her interest in the property to your daughter but that would only transfer her friend’s ownership interest in the home to your daughter. The mortgage would still remain in both of their names until the loan is paid off, refinanced or the lender were to agree to remove the friend’s name from the mortgage. Most lenders never remove the name of one of the parties from a mortgage.
You mentioned that the home is a mobile home. Does she own a home that is actually a recreational vehicle of the type that is driven around the country? For those types of homes, the friend would need to sign over the certificate of title to the vehicle and give her a bill of sale for her interest. But here again, the transfer won’t release her friend from her obligations on the loan.
Assuming it’s a traditional mobile home (also known as a manufactured home) that is placed permanently on a piece of land, your daughter should work with her friend to quit claim the property into her name and refinance the loan so that the friend is off the mortgage and title.
If your daughter can’t afford to refinance the mobile home on her own, then she will need to work with her friend to try to sell it or rent out the friend’s bedroom to bring in enough cash to make the mortgage payments.
For more details, please consult with a real estate attorney.
April 16, 2009