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Why would Bank of America now require a quit claim Deed to allow a loan modification when the party already did a Deed of Gift?

Sterling, VA |

Co-buyer/co-borrower unmarried son executed a Deed of Gift releasing all rights title and interest over a year ago to his co-buying/co-borrowing unmarried Mother. Mother is unable to modify the loan because Bank of America won't accept the Gift Deed. They require a Quit Claim Deed. In Virginia the Gift Deed conveys all the son's interest to the mother but this type of Deed does not trigger recording taxes. A Quit Claim Deed is more expensive to record and does trigger recording taxes. What is behind Bank of America's fixation on Quit Claim Deeds?

Attorney Answers 1

Posted

Bank of America has offices all over the United States of America, and one of them is located in the far Western states. The folks who are in those offices are familiar with the legal-title-transition document known as a 'Quit Claim" deed because that is THE medium through which ANY and all legal rights are extinguished in western states. Virginia, taking its legal traditions from Great Britain, continues to use the 18th century document known as a Deed of Gift- which is just as valid. However, BoA doesn't want to have to train its people in the niceties of every state, and virtually ALL states (except Louisiana) accept the Quit Claim deed. It doesn't change your legal title, but if you want to force this issue, you're going to have to deal with someone with a law degree in BoA's hierarchy. Go ahead to www.courts.state.va.us and go to deed calculation under the Circuit Court page of the county in which you reside to figure out just how much more this document is going to cost you in recording fees, and then provide that information to BoA. They might listen. More likely, they won't care and will just tell you that this MUST be done their way.
Good luck.

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2 comments

Asker

Posted

Susan, thank you for your explanation. I do know the cost to record. It is well over one thousand dollars. It is shocking to realize a lender can make legal recommendations for title in Virginia. Bank of America actually recommended that she she get a quit claim deed on line and prepare it herself, then go to the courthouse and record it. Isn't that providing legal advice? Anyway, in Virginia the Deed of Gift actually allows the granting of "warranty" while a Quit claim Deed just conveys "whatever interest in may have" without warranty. It is scary the defects in title this woman could have created, had she followed Bank of America's advice. It is funny, that by your answer you seem to have the same low opinion of Bank of America. Good for you!

Susan Leslie Fraser

Susan Leslie Fraser

Posted

Dear Asker: I don't have a particularly "low opinion of Bank of America": the reality is that many of the banks which participated in the "GreedRush of the '00s" failed to accurately and appropriately estimate the deluge they would experience when all of those loans (which never should have been given the go-ahead because the value truly wasn't there) exceeded the true loan-to-value ratios which have now been restored. On top of that, banks were assumed by other banks, often with no idea of the chaos of their mortgage records, and now they're trying to make sure that they are in compliance with federal laws BUT at the same time also making sure that they don't let go any of their own legal advantages, and hiring less-than-lawyers who are told to read scripts.....to get off my soapbox, the bottom line is that you're going to have to push against BoA HARD-they do respond to letters from lawyers, sadly enough.

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