Credit Score Ratings and Quit Claim Deeds
by Marcel from Edmonton, Alberta, Canada
Ask Kate how credit score ratings and quit claim deeds are connected: Kate, do Quit Claim Deeds save my credit rating? Is there any criteria in which the lender may refuse a Quit Claim Deed? I am a co-mortgagor with a joint tenancy capacity in a 4 year old mortgage.
Our covenant was that the other co-mortgagor was to fulfill responsibilities of upkeep, management, and servicing the debt, as she was to eventually move into the property. My responsibilities were to provide my expertise in placing tenants in the property (which has a basement suite) along with my credit history to provide better interest rates.
From day 1 she postponed having me place tenants while she filled the dwelling with what eventually became truck loads of miscellaneous personal effects. She did not want me to place tenants until she could "manage" her "stuff".
Instead of managing her stuff, she continually added more "stuff" to the interior and exterior of dwelling. I'd made attempts to have her put her "stuff" into storage as the fees would justify being offset with rental income or for her to move in to the property.
I learned too late that she has the Hoarders disease which has affected every single decision of hers to use reason in having the property either produce revenue to service the debt or to utilize as her own space vs having commitments at 2 properties.
A long story short, she is now $14k in mortgage arrears and $20k against the tax roll (taxes and property clean up charges). She allowed the boiler system to freeze during this past winter by having utilities disconnected for nonpayment.
We have been served a statement of claim from the lender's lawyers and have 14 days to produce a defense. There appears to be little or no equity per costs required to bring the property to a livable state.
I am considering a Quit Claim Deed with the Lender to save my 30 year credit history (which is an R1).
This is a conventional mortgage which eliminates any monetary claim from the lender per the Provincial Law of Property Act. I am very concerned of the affect on my credit rating if a foreclosure transpires.
Do Quit Claim Deeds save my credit rating and is there any criteria in which the lender may refuse a Quit Claim Deed resulting in turning the property over to the lender?
Thanking you in advance.
Kate Answers: Credit Score Ratings and Quit Claim Deeds
Please take into consideration that my mortgage and title experience is from the US.
So what I am about to say may have no bearing on your situation whatsoever since Canadian terms and practices may differ.
Regardless, I strongly recommend seeking legal counsel.
Owning & Title vs Owing & Mortgage
Titles (the owning
part) are related to Quit Claim Deeds. Mortgages (the owing
part) are related to Credit Score Ratings.
Or another way it could be compared is to say recording Quit Claim Deeds can affect the record of ownership. Credit Score Ratings can be affected by timely (or late) mortgage payments.
This is an important distinction which I have written about at How You Could Sell Your House But Remain Obligated on the Mortgage
I've also answered similar questions on the relationship between Credit Score Ratings and Quit Claim Deeds which I hope you find useful. Please go to
1. Ask Kate: Will a quit claim deed help to save the credit score of a co-signer
2. Ask Kate About Quit Claim Deeds by Olga from Ajax, Ontario
3. Ask Kate: Quit Claim Deeds and Real Estate by Ross from Utah
4. Ask Kate: Do Quit Claim Deeds Protect Credit Score Ratings
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