Hello y Hola
I'm Peter Hudson. I am a licensed real estate agent and REALTOR® in the State of Arizona and I have the special designation as Real Estate Collaboration Specialist - Divorce (RCS-D). This designation means I have specialized training with divorce situations in real estate transactions.
I specialize in helping and representing couples who plan to divorce avoid expensive and long-lasting mistakes with their family home with compassionate explanations of all possibilities with the marital home.
Although my information will help anyone who is planning to divorce, my information will be particularly helpful to those who are preparing an uncontested divorce (as much as possible - I know, I've been there!) and who are at least being amicable in the decision.
Remember, Arizona is a Community Property State. You can read more about this at this link: Community Property State Explained
Look around and if I can answer any real estate related questions for you please reach out.
Debt Follows the Person(s)
When you and your spouse signed the loan documents for the house, you both committed equally to paying off the loan.
If you are planning to divorce and your soon to be ex-spouse intends on keeping the house you both will continue to be responsible for the original home loan until the loan is paid off, either through a refinance or selling of the house to a new buyer.
Just because you give up your rights to the house (see our information on the Quit Claim Deed Nightmare) does not mean you are released from the mortgage!
The lender does not care if you gave up any rights to the house, they still want their money! They will get their money or they will take the house back.
If your soon to be former spouse keeps the house and they cannot make the house payments, or cannot refinance the house on their own, you both will be attached to the home loan until it is paid in full.
Having your name on the existing mortgage could make it impossible for you to purchase a new house for yourself because you are equally responsible for the mortgage on the former house.
Liens Stay With the House
When you buy a home and sign the home loan documents, a lien will be created and filed with the County Recorder. The home becomes collateral for the home loan. The lien restricts you from selling the property to someone else, without first paying off the home loan, taxes, and any other encumbrances.
Liens and Loan Hierarchy
When there is a sale of the house deeds and liens are recorded with the County, and a Lien Hierarchy is created.
In most cases, within the lien hierarchy the first mortgage is placed in the First Position. If there is a second mortgage (or HELOC) it is placed in the Second Position. This means that if you sell the house the first mortgage will be paid off first, the 2nd mortgage will be paid off second.
However, if you have tax or property tax liens these liens will automatically be moved to the First Position.
For example, if you have a first and second mortgage, then have a government tax lien (because you didn’t pay your personal income, business taxes or property taxes) the lien hierarchy will be as follows: First Position: Tax Lien Second Position: First Mortgage Third Position: Second Mortgage.
The government will ALWAYS get their money first!
If you sell your house and the house cannot generate enough money to pay the tax liens, mortgages and closing costs you will have to pay money out of pocket to cover these debts, or your house could go into foreclosure.
Transferring the House to a New Owner
Before you can transfer the house to a new owner, all of the liens on the house must be satisfied (paid.)
The new home mortgage loan that the new buyer takes out on the home will hopefully pay all of the encumbrances (existing mortgages, any other liens, commission to sell the house, property taxes, delinquent HOA fees if any, etc.) on your house.
Paying Out of Pocket
If the new mortgage the buyer takes out will not cover all of the encumbrances on your house you will have to pay the deficit out of pocket before the property can be transferred to the new buyer.
If you cannot pay the deficit out of pocket, the sale of the home will not go through at the time of closing, and you’ll have to resolve the issue by either borrowing the money from someone to pay the deficit, negotiate a short-sale with the lender, continue living in the house and resume making the monthly payments, let the home go into foreclosure and you may have to file bankruptcy.
Know Your Liens and Loans Options
Should you sell the house? Can one of you refinance the house on your own? What are your options?
We recommend you have a consultation with our real estate professionals so you can understand all of your options.
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What I Do:
I specialize in helping couples who plan to divorce avoid making expensive and long-lasting mistakes with their marital home.
Although my information can help anyone who plans to divorce, it is best suited for those who are not contesting the divorce (too much) and are as amicable as possible.
How Do I Do This?
I do this by helping people completely understand all of their options with the marital home including keeping the home, selling the home, and explaining why house due diligence, updated credit reports, and title searches can be beneficial.
I explain to our clients how their decisions with respect to the home can impact their quality of life for many years to come.
I explain to our clients how they need to prevent credit damage and preserve their ability to buy a home in the future.
With the information I can provide, divorcing couples can make better decisions and perhaps avoid making expensive and long-lasting mistakes.
I can also introduce the couple to other professionals, such as mortgage counselors and title search professionals.
For Attorneys and Mediators - How I Can Assist Your Clients Make the Best Decisions for Them?
In my real estate business, I explain to our client's many details about their joint home purchase and what they should consider regarding the family home before filing for divorce, during the divorce, and their life after the divorce (and how it relates to the marital home.)
The couples who can benefit the most from my services are those who are considering an uncontested divorce and/or who are willing to discuss these matters as amicably as possible.
If the couple has the attitude that they are going to take the other one for all they have we are not a good match.
I Do Not Take Sides
I'm often asked by clients who are heading for divorce 'whose side are you on?' They are usually surprised to hear that I'm on the side of both. I want the couple to make the best choices for both, and make the best decisions for their futures because there is a light at the end of the tunnel. I know, I have been there!
Why Do I Do This?
I do this in the interest of helping my clients protect their credit ratings and to preserve their future homeownership capabilities.
If the couple decides to sell the marital home I hope that the information I shared has been helpful and they will consider me for the listing of the house.
Less Than 1%
Less than 1% of all real estate agents have the Real Estate Collaboration Specialist - Divorce (RCS-D) designation. Agents without this designation could just be guessing how to advise you through this difficult time, we'll give you the facts that only professionals with our specialized training can provide.