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Is it mortgage fraud if I add someone to my property's deed or title?

Q: If I was to receive a gift from my mother to buy a home and to qualify for a mortgage, and then, once I purchased the home, decided to put her on the title, is this mortgage fraud? Or does the fact that they are two separate transactions make it okay? That is, if I choose to put her on the title for the percentage of the home that was covered by her gift, is this okay? I am not paying her back, per se, but rather gifting her in return. I want to know if this is an issue.

A: No, it is not fraud as long as you didn't lie on your mortgage application or provide false documentation.

A number of persons can be listed on the deed or title to a property but not necessarily on the mortgage and this is not that uncommon. For example, an addition to a title can happen when a person owns a home and later gets married. That said, there can be legal and tax ramifications of such an addition, so you'll want to talk to a lawyer and an accountant before you proceed.

Your lender will need to be aware of/agree to this change, you'll likely need an attorney to draw up and file paperwork and a quit-claim deed, and there can be tax implications (since this transfer of interest in the asset is considered a gift). Start with a local real estate attorney, your accountant, contact your lender, and go from there.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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