Where does a Certified Divorce Lending Professional (CDLP™) fit into the mediation process?
Mediation is a process in which a third person helps the participants in a dispute to resolve it. In order to resolve the dispute, the participants must negotiate a solution. Problem-solving is part of the negotiations. The process of mediation is the management of other people’s negotiations, and the mediator is the manager of the negotiations who organizes the discussion of the issues to be resolved. The more coherent and organized the process, the easier it is for the participants to arrive at solutions that are mutual and appropriate for them.
At the center of the mediation process is gathering the data (fact-finding), defining the problem, and developing options. When the subject matter is specialized as in negotiating the marital home, the cycle becomes specialized and may require the need for mediation support from a Certified Divorce Lending Professional (CDLP™).
Ideally, both parties will agree on the appropriate disposition of the marital home. The need for mediation support utilizing a skilled CDLP™ is important to make sure that the negotiated agreement can actually be executed as in refinancing the current mortgage obligation for an equity-buyout or selling the marital home and each party purchases a new home independently. Actually coming to the agreement of how to handle the marital home may be the easy part and executing the agreement may require a deeper look into the details.
A skilled mediator will recognize and explain the various options of the marital home available to the divorcing couple and help the parties understand the implications of each option. Again, addressing the details of each option requires the support of a Certified Divorce Lending Professional. Consider the following Scenario. Mike and Kim have been married for 17 years and have lived in the home for 11 years. Kim is employed as administrative support at the local school and will require spousal support in order to afford housing independently once the divorce is final.
Through mediation efforts, Mike and Kim agree that Kim will retain the marital home and she agrees to a deadline of 120 days to complete the refinance process. Mike agrees to give his equity share to Kim in lieu of paying future spousal support. The parties also agree that if Kim is unable to complete the refinance within 120 days, they will sell the marital home.
There may be a lot of potential issues with this negotiation and mediated agreement. Without the input and mediation support of a Certified Divorce Lending Professional (CDLP™), Kim may not have the required income without the receipt of spousal support; the time frame in which the refinance is to take place may become an issue; and if the marital home is sold, Kim may still not be in a position to buy a new home.
Sometimes the couple has a budget or income problem that needs expert advice. The mediator is typically not an accountant or an attorney and therefore does not take responsibility for providing expert advice. The mediator refers the couple to an expert for specific advice on the specialty situation. Utilizing the expert advice of a Certified Divorce Lending Professional (CDLP™) to address the options for obtaining future mortgage financing is an important step in the mediation process.
Do you have questions about how divorce can impact the ability to obtain mortgage financing? A Certified Divorce Lending Professional's (CDLP™) knowledge and experience can help make the transition much smoother and successful for all parties involved.
Working with an experienced divorce mortgage planner who is well versed in the many ways divorce affects the mortgage is a huge benefit to both the divorce team as well as the divorcing homeowners. You can't think traditionally when working with divorce and mortgage planning.
Always work with a Certified Divorce Lending Professional (CDLP™) when going through a divorce and real property or mortgage financing is present.
This is for informational purposes only and not to provide 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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