Recently, an email promoting a webinar for mortgage and real estate professionals suggested expanding into the divorce market with the misleading subject line: “Meet the target audience that doesn’t care about mortgage rates.” This approach is not only disrespectful but also a significant mistake. Divorcing homeowners often need mortgage financing and should be treated with the seriousness and respect they deserve.
Understanding the Complexity of Divorce for Real Estate and Mortgage Professionals
Family law professionals are frequently approached by mortgage and real estate experts looking to offer services to divorcing clients. While 65-70% of divorces involve real property, many of these professionals fail to grasp the complexities involved:
- Divorcing Homeowners Have Options: They are not simply an "easy to close" group of potential clients.
- Potential for Harm: Without understanding the legal and financial implications of divorce, professionals can inadvertently worsen the situation.
- Not a Temporary Market: Divorcing homeowners and their family law teams should not be seen as a temporary market fix until broader market conditions improve.
Divorce entails significant wealth transfer with complex legal and financial implications. What might be legally permissible in a settlement may not be feasible from a mortgage perspective.
The Importance of Qualified Income in Divorce Settlements
Consider the scenario where Jane receives a monthly equalization payment of $10,000 for five years. While this seems like a substantial income source, equalization payments may not always qualify as income for mortgage financing. This is a critical nuance that even experienced mortgage professionals can miss.
The Misunderstanding of Equity Buy-Outs
The concept of an Equity Buy-Out is often misunderstood. Many think of it as a specific mortgage loan product, but it is not. This misconception underscores the necessity for specialized knowledge in handling divorce-related mortgage issues.
The Need for Expertise in Divorce Mortgage Planning
Divorcing homeowners and their professional teams deserve informed and specialized support. Integrating divorce mortgage planning into case management should be standard practice, whether the homeowner chooses to refinance or sell the marital home.
The Role of a Certified Divorce Lending Professional (CDLP®)
Recently, Jody Bruns, President and Founder of the Divorce Lending Association, presented to the Amicable Divorce Network on “What is a CDLP® and Divorce Mortgage Planning?” You can watch the recording of this presentation here.
WARNING: Choosing the Right Professional Matters
The Certified Divorce Lending Professional (CDLP®) program, offered by the Divorce Lending Association, is the most comprehensive divorce mortgage planning training available. It prepares mortgage professionals to handle the financial intricacies of divorce with expertise.
For many divorcing homeowners, their marital home and other real property are their most valuable assets. The role of a CDLP® is to address the unique financial issues related to divorce, ensuring homeowners make informed decisions about their home equity and purchase opportunities.
Integrating Divorce Mortgage Planning into Case Management
Certified Divorce Lending Professionals are experts in divorce. They are licensed mortgage professionals who have completed rigorous certification and ongoing education in divorce mortgage planning. Their broad understanding of the intersection between family law, financial planning, real property, and mortgage financing sets them apart from traditional mortgage professionals.
The role of a CDLP® is to support not only the divorcing client but also the professional divorce team through the four phases of divorce mortgage planning. They offer creative solutions and clear guidance, helping divorcing homeowners make informed decisions about their home equity and mortgage strategies.
The Importance of Early Involvement
To provide the highest level of service to divorcing clients, it's crucial to recognize how the home impacts various facets of divorce and life afterward. Involving a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process can set the stage for successful mortgage financing and a smoother transition for the divorcing homeowners.
Conclusion
Navigating the financial implications of divorce requires respect, expertise, and a comprehensive understanding of the complexities involved. Mortgage and real estate professionals must be well-versed in these nuances to provide genuine value to their clients. Integrating divorce mortgage planning and working with Certified Divorce Lending Professionals ensures that divorcing homeowners receive the specialized support they need.
Call to Action
For more information on how divorce may impact your ability to obtain mortgage financing, contact a Certified Divorce Lending Professional (CDLP®). Download the "Divorcing Your Mortgage Homeowner Workbook," a comprehensive guide to credit, real estate, and mortgage financing after divorce, to help you get organized, be prepared, and understand your mortgage financing position.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations.
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