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Quitclaim Deed Does Not Override Contractual Obligation

Dear Experian,

I recently had my credit checked for a preapproval on a new home purchase and found that my credit scores and my wife’s had dropped from the high-700s to mid-600s due to two late mortgage payments on an investment property that we had quitclaimed to a family friend. I spoke with the family friend who advised us that she never received the bills. She said it’s all paid up to date now, but I am so mad that our credit score dropped as a result. I want the property to be put in her name so that our credit will not be affected if she misses a payment again. Is there any way to show proof to the mortgage company that the property was quitclaimed, and therefore, the bill does not come to us?.


Dear MJK,

It’s always important to understand the details and consequences of any financial agreement, especially when it involves family and friends. When you quitclaim deed a property, the rights and ownership of the property are transferred to a new owner. However, quit claiming your property to someone else does not release you from the financial obligation of any loan associated with the property. Therefore, you are still responsible for the payments unless the mortgage loan itself is refinanced in only the name of the new owner. As a result, any late payments made by your family friend will be reflected on your credit report.

You can contact the mortgage lender directly to discuss the circumstances behind the missed payments and to find out what your options are going forward.

If you no longer wish for the mortgage loan to be in your name, you may want to consider selling the property to your friend. Doing so will ensure you avoid having any impact your creditworthiness and credit scores resulting from future late payments made by your friend.

Thanks for asking.
The “Ask Experian” team

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