Can bank reposses the house even if name on mortgage is different from the name on a deed?

Question

I've Transffered a deed to my friend. But mortgage is still on my name. Friend making payments to my loan. What if he stops making payments. Is Bank has a right to reposses a house even if I don't own it?

Answer 1

Absolutely. If the mortgage wasn't paid off when you transferred title to your friend, then your friend got title subject to that mortgage, and the lender can absolutely foreclose if it's defaulted on. In fact, most mortgages have a "due on sale" clause to prohibit people from assuming their loans, so your lender could likely call the mortgage due and/or foreclose whether or not your friend makes the payments.

From the perspective of a borrower, it's not such a good idea to do what you did. Your credit can be tarnished by the late payments of your friend, because you're still liable for the mortgage!

Answer 2

The friend took "subject to" the mortgage, as it was a matter of public record.

Not only can they foreclose if he stops making payments, the mortgage probably has a "due on sale" clause, so if they figure out you don't own it anymore, they can accelerate the balance with very little notice.

Either one is going to ruin YOUR credit, not his.

You screwed up.

Answer 3

I would say yes. And your credit will be ruined if he/she stops making payments. This is very bad for everyone involved.

Answer 4

How did you transfer the deed to their name, you shouldn't have it if you still owed money on it. I hoped you used a lawyer to do this and didn't just do it yourself.