Quick Claim

[justalayman]

Normally, most community property states are non-recourse for mortgage debt. That means that the bank cannot go after the people personally for the debt, they can only seize the property. Therefore she would not be liable for the loan if he is the only person on the mortgage and deed.

When it comes to other kinds of debt I agree with you, in a community property state a credit can go after the spouse... But usually the creditors do not know about any spouse, particularly if the parties are separated, therefore you don't see that happening really when someone is separated.

I do see that Arizona is a non-recourse state. Due to that, I would have to agree with you. That is one bit of info I failed to consider.

The only problem I see is that OP is married and intends on remaining married. If the spouse is honest in the applications and titling of the home, the fact they are married is easily discovered. As such, I wonder if OP's wife will be faced with any difficulty or application of the possible indebtedness in seeking a mortgage loan.

OP's wife needs to be sure to keep new home as a separate property. If she doesn't, that means OP would have a claim as marital asset if they should ever divorce. The bank may consider this when lending the money.

This is one situation I am seriously curious about hearing the outcome.

 

[Teppo37]

The whole thing is she wants her own house, so by me refinancing the current one in my own name and her doing a quit claim deed to me for her interest is exactly what I will do for her at the time she gets a house, only concern is if they count my mortgage payment towards her debt, that may make her debt to ratio be to high and that was the main reason I asked the question is she financially not obligated on my house any longer since she is off the mortgage and she quit claimed my house to me even though we are in a community property state.

 

[justalayman]

yep, that is exactly what I got out of your questions. As I stated, I do not know if they will apply any of the debt of your house to her debt load simply due to being married. I suspect not, given LdiJ's point but I suspect they can if they choose to.

 

[Teppo37]

Well thanks to all who replied, I guess its just a waiting game now, I will post back after it happens....

 

[nextwife]

Normally, most community property states are non-recourse for mortgage debt. That means that the bank cannot go after the people personally for the debt, they can only seize the property. Therefore she would not be liable for the loan if he is the only person on the mortgage and deed.

You are misunderstanding non-recourse loans. When a state is non recourse state, that only applies to PURCHASE MONEY mortgages, not refis.

 

[FlyingRon]

You are misunderstanding non-recourse loans. When a state is non recourse state, that only applies to PURCHASE MONEY mortgages, not refis.

That's the California rule.

Arizona says any loan on a single family residential property on less than 2.5 acres is non recourse. It matters not if the loan was the original purchase or a refinance. It also doesn't matter if you are occupying it or renting it out there.