Q: The owner of a property is in default of mortgage payments: can she deed the property to a third person and what are the
A: In theory yes, but third party is buying subject to the mortgage; meaning if 3rd party wants to keep the house he/she would need to pay off the mortgage. Third party and owner should hire a lawyer.
A: I agree with my colleague, the owner can deed the property subject to the existing mortgage, but know that the original owner is still liable for the debt owed against the property. This is very important because if the new owner does not pay off the current mortgage and the property goes into foreclosure, the new owner and the original owner would be named as defendants in the foreclosure, but the original owner would be responsible for any deficit after foreclosure sale, even though he does not own the property any longer. While such a transfer can be made, I would advise against it for the protection of the original owner, unless proper precautions are taken. Jennifer
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