Right off the bat, in a low-cost, simple, uncontested, no-fault Pennsylvania divorce, the two parties must come to an agreement on everything, including what happens to any real estate either of both may own. And, yes, even if there is a mortgage or other loans securing the real estate, you do own it. Many – if not most – people do not realize that when they closed on the house, they were sent (or given) the actual original deed to the realty. Real estate is not like buying a vehicle with a loan. Real estate is always there. That is why it is called “real” property. Everything else more or less has a limited life, including vehicles. As soon as you drive a brand new vehicle one inch off of the dealership lot, it becomes a used vehicle, immediately worth less than you just paid for it and it continues to depreciate. That is why you will not be given the title until it is paid off in full. But you do have, somewhere in your possession, the actual original deed to your home. Even in the County Recorder of Deeds there is only a copy.
The deed says who owns the realty. The mortgage only says who owes the money. The mortgage does not give anyone on it any ownership rights. The names of the owners on a deed can be changed (by means of a new deed), but the names on the mortgage can only be changed by paying it off in full or by refinancing into the name of someone else who then takes over responsibility for payment of the loan. You see, if, for example, John and Mary Smith transfer ownership to Robert and Susan Jones by a deed from the first couple to the second couple, the lender (almost always a bank) doe not really care. Why? Well, if the mortgage does not get paid by someone, the lender will foreclose and take the realty and eject whoever is living there, no matter whose names are on the deed.
So, before I continue, I hope that you can now understand that you can exert some control over the ownership of your realty even if you have a mortgage and/or other loans attached to it. Accordingly, if you want a low-cost, simple, uncontested, no-fault divorce and the two of you can decide what you want to do with the ownership of your realty, you should be able to implement your choices. A new deed can be created from both spouses to the one who will remain the sole owner. Alternatively, the realty could be sold and the proceeds fairly – which is not necessarily to say equally – divided. It can be agreed that one or both parties may continue to reside there until a certain date or occurrence (such as the last child becoming emancipated). Money might be paid from one party to the other, now or in the future, in payments or in a lump sum. Just bear in mind that none of this changes the names on the mortgage unless the realty is sold or the party receiving it re-finances the loan into that party’s sole name. And frequently, the party receiving the realty cannot swing the financing so it is agreed to let the loan stay in both names with the party receiving the realty promising (in an agreement prepared by a lawyer) to make each payment on time and to hold the other party harmless therefrom. But, even in that case, should the party promising to make the payments not do so, the other party remains responsible…and that party’s name may have been removed from the deed in accordance with the agreement. The parties could have agreed that in the event of the responsible party’s failure to pay, the realty is to be sold and the proceeds divided in an agreed fashion or that the realty be transferred back into the sole name of the other party.
What if the parties cannot come to an agreement regarding the realty? First, forget the low-cost, simple, uncontested, no-fault divorce process. You would then be into an expensive contested divorce and, ultimately, the judge will decide what will happen to the realty (and your other assets if there was no agreement about them). Among other considerations, the judge will mainly consider the most economically fair way to divide the asset(s) and marital misconduct (who has been bad and who has been good) will play no part. The court’s goal would be to set both parties on relatively equal financial footing going forward, the party needing more getting more.
An experienced lawyer could assist you in determining what would be fair without the need to spend many thousands of dollars in a messy, contested case to have the judge tell you essentially the same thing, but these matters are frequently highly charged with emotions that can lead to less than rational decision making. If the parties can try to treat these issues as a business decision, they will be behind you sooner and far less expensively. I know… easier said than done.