How does a quitclaim deed after a sheriffs sale work?

Question

So my associate and I recently found a property in forbearance and about to go into foreclosure. The seller has two loans - one for 3.3mil, another for ~300k, 300k in tax liens, 100k in realtor fees, and 300k in attorney fees, and the property itself is worth about four mil.

In trying to structure a deal that would work, we came across someone who mentioned that we should allow the property to go into foreclosure and use a quitclaim deed signed by the seller to transfer the property into our name upon the sheriff's sale to circumvent the liens. She said she had done this like 50 times back in 07-08 and that it's a real thing.

Has anyone else heard about this? Time is of the essence, and I'm unsure how to proceed. I need a lawyer to review the situation but can't find a lawyer who has dealt with this.

As always, any help is greatly appreciated.

Account Closed · Answer

Hahhahhahahahahah. Sounds like fraud or delusions, big time.

Liens are usually against the property and against the person. A Quit Claim Deed simply says that the signor is transferring any claim of his interest in the property to the other party. It doesn't clear liens. You could give me a QCD for the Brooklyn bridge, because, and give me a little rope on this, you probably don't own the Brooklyn bridge.

Nothing illegal about telling people you are giving them any interest you may or may not have in a property.  However, in this case he does have an interest in the property and liens against the property and against him. Any one of his creditors can force him into bankruptcy. I'm sure the attorney he owes money to knows this, as does an real estate agent. Bankrupty has a claw back of up to 2 years depending on the situation and people can be and have been prosecuted for bankruptcy fraud.

Your Comment: "we came across someone who mentioned that we should allow the property to go into foreclosure and use a quitclaim deed signed by the seller to transfer the property into our name upon the sheriff's sale to circumvent the liens."Tell the woman who said she did this 50 times back in 07-08 to increase her Xanax and double her Nuplizid.

Nope, claim is bogus and post is likely click bait.

Wayne Brooks · Answer

@Kyle Keller Yeah, somebody is spouting delusions....

-a QCD has no effect on liens whatsoever.

-a foreclosure action by a first mtg in itself extinguishes any junior liens, no qcd necessary, even If it did do anything.

Bob Floss II · Answer

@Kyle Keller Was she your bartender or uber driver?

Account Closed · Answer

First you have to order a title report because there is so much going on there. Then you have to verify the auction sale date. That is the amount of time you have to work with. There may in fact be two or even three different sale dates. One for the primary, one for taxes one for a second. Could even be one for an HOA.

If the tax liens are federal you do one thing or if they are state you do something else, it makes a difference. Why would there be realtor fees? There may be a lis pendens (lawsuit) by the realtor or even the attorney which prevents you fom getting a clear title until that lawsuit is settled or litigated.

What if you give money to the seller and a lawsuit is pending against the seller and the attorney wins, giving him the property? You certainly won't get your money back from the seller. I can tell he's that kind of guy.

There may already be fraud invloved judging from the number of people who came to his party in a sour mood. If you were owed $100,000 would you walk away from it? Nope. Neither are these guys going to.

If you get involved in this one, your position is that of holding a stinky balloon of cow manure over your head and they all have needles and are tying to poke the balloon.

Kyle Keller · Answer

More information said the idea was to extinguish the junior lien position. A lot of people have called fraud, seems like not a good path to go down.

How does a quitclaim deed after a sheriffs sale work?

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