022 - The Akiona Law Podcast: Featuring Mihaella Bayla

In this episode of the Akiona Law Podcast, Lani speaks with Certified Divorce Lending Professional ("CDLP") and former tax attorney, Mihaella Bayla about how involving a CDLP during the divorce process helps divorcing homeowners make informed decisions and avoid costly pitfalls regarding their mortgage financing options during and after divorce.

Transcript

00:00:14.000 --> 00:00:20.000

5, 4, 3, 2, one Hello! And welcome to another episode of the Akiona law.

00:00:20.000 --> 00:00:38.000

Podcast, I Am. Family, law, attorney, Mihaella. And this is a podcast, we're in, we talk about anything and everything that intersects in the areas of family law, including divorce and collaborative divorce.

00:00:38.000 --> 00:00:42.000

And today I have with me. My guest is certified.

00:00:42.000 --> 00:00:48.000

Divorce, lending professional, financial, neutral, and informal life.

00:00:48.000 --> 00:00:53.000

She was a tax attorney. Mihaella!

00:00:53.000 --> 00:00:55.000

Welcome to the show.

00:00:55.000 --> 00:00:57.000

Thank you so much. Thanks. Thank you for having me.

00:00:57.000 --> 00:01:00.000

And well, I'm so glad you can be on today.

00:01:00.000 --> 00:01:02.000

You just have. You know I met you, and I was just blown away about what you're doing now as a certified divorce.

00:01:02.000 --> 00:01:14.000

Any professional, and you've been practising law for a long time about 15 years.

00:01:14.000 --> 00:01:33.000

Your licensing California, your license in Washington, and the fact that you did tax you worked in that area of just tax law and now you're bringing that expertise into a certified divorceiving professional. I'm just so excited to have you on here and the reason why folks is because

00:01:33.000 --> 00:01:51.000

she's in a very specialized. Is very specialized in any area that is, gonna be so helpful for keeping in the areas of family law, because what she does is she works with divorce attorneys, real estate agents, financial planners and people, going through divorce to talk about

00:01:51.000 --> 00:01:55.000

mortgage, lending whether you're trying to.

00:01:55.000 --> 00:02:03.000

You're going through divorce, and you need to talk about refinancing, or you're going. You're going to purchase a home.

00:02:03.000 --> 00:02:08.000

Can you tell us a bit about yourself? Like, how did you get from going through becoming a tax attorney?

00:02:08.000 --> 00:02:15.000

Into doing this mortgage, lending niche area with people going through divorce.

00:02:15.000 --> 00:02:19.000

Yes, Lonnie, thank you so much, and such a pleasure to be here.

00:02:19.000 --> 00:02:38.000

It actually happened accidentally and organically, I was believe it or not, a little bit burnt out on the wing tax work, and I was trying to figure out what my next journey will be, because I knew I wanted to sort of pivot and during this time my husband who was a mortgage broker had

00:02:38.000 --> 00:02:45.000

the chance to open his own brokerage, and we have worked together in the past, and we really enjoy working together.

00:02:45.000 --> 00:02:57.000

And he asked me if I'm willing to just take a year off from my law firm and help him launch this company, and my purpose was initially going to be only as a business manager, you know.

00:02:57.000 --> 00:03:00.000

Right, because wait. You said you had your own law firm.

00:03:00.000 --> 00:03:03.000

Hi, did. Yeah, for about 10 years at that point, right? About 10.

00:03:03.000 --> 00:03:06.000

How many years at that point? Wow, okay. If you took a break?

00:03:06.000 --> 00:03:11.000

Yeah, yeah. I took. I took a break for about a year.

00:03:11.000 --> 00:03:15.000

That was the plan to go, help him launch his business initially.

00:03:15.000 --> 00:03:19.000

I was doing the integrating of contracts, hiring training.

00:03:19.000 --> 00:03:24.000

Agr anything that was business related, but not necessarily mortgage-related.

00:03:24.000 --> 00:03:29.000

However, very soon into my into my one year project the refinance boom hits, and before I knew it I was helping out loans.

00:03:29.000 --> 00:03:46.000

I was licensed because we are trying to keep up with demands, and during this time I started noticing a pattern whenever there was a more complicated case.

00:03:46.000 --> 00:03:47.000

Okay.

00:03:47.000 --> 00:04:02.000

I was asked to sort of help out, especially when it came to divorces, and I started seeing this really unfortunate pattern, where folks who would have had just the minor change and the way that may be their divorce request written, or maybe the way that their spouse of support was awarded could

00:04:02.000 --> 00:04:08.000

have kept the house, or be able to qualify, to purchase a house, and this is what their intention was.

00:04:08.000 --> 00:04:25.000

Their hot time. This is what the plan was, and I had to be my team, and I had to be in the unfortunate position to give them the news that I'm unfortunately you do not qualify for a mortgage because Xyz, which I could see was preventable and the more that I looked into this the more

00:04:25.000 --> 00:04:43.000

passion I felt about it that it was such a need in the industry of such a need to go out and start helping out attorneys and clients going through a divorce with this specialized planning that makes such a difference at the end of the divorce to make sure that folks can have an

00:04:43.000 --> 00:04:45.000

affordable and safe place to live.

00:04:45.000 --> 00:04:52.000

And when you say specialized planning, just to be clear, you're talking about this specialized mortgage refinancing.

00:04:52.000 --> 00:04:57.000

Exactly. So I I research what was available as far as education and licensing, and I found a divorce lending association.

00:04:57.000 --> 00:05:08.000

They've been around for about 10 years. They offer incredible education, testing, ongoing support.

00:05:08.000 --> 00:05:09.000

And I decided to join us. I became a certified divorce.

00:05:09.000 --> 00:05:19.000

Lending professional or Cbp. And the planning that I do, I sort of it's a hybrid.

00:05:19.000 --> 00:05:20.000

Yeah.

00:05:20.000 --> 00:05:27.000

Oh, wait! Can we go into that cause? I didn't even know such a thing as a certified divorce lending professional on time that you so can you explain what exactly that is?

00:05:27.000 --> 00:05:38.000

Absolutely. If you wanna think of the intersection between family law, tax law, financial planning, and then divorce mortgage lending by that. What I mean by I'm sorry.

00:05:38.000 --> 00:05:45.000

Because this is I. So you said, Let's certify divorce, Lenny. Professional.

00:05:45.000 --> 00:05:50.000

Let's think about the intersection of family law tax law.

00:05:50.000 --> 00:05:51.000

Financial, planning.

00:05:51.000 --> 00:06:02.000

Financial planning, and then some very advanced and limited loan opportunities that are only available to divorce individuals for a very limited amount of time.

00:06:02.000 --> 00:06:06.000

Okay.

00:06:06.000 --> 00:06:07.000

Hmm!

00:06:07.000 --> 00:06:17.000

So if you think of living in that specific space, it is planning that is really efficient.

00:06:17.000 --> 00:06:18.000

Okay.

00:06:18.000 --> 00:06:23.000

If it's done at the beginning of the course or during the negotiation process, really, before the divorce is finalized, because then we can really work with a divorce team, think outside of the box, find solutions.

00:06:23.000 --> 00:06:32.000

And set up these divorcing homeowners to be in a position where they have options, or at least they understand what's doable or not.

00:06:32.000 --> 00:06:39.000

Doable sort of anticipate robots and buy solutions to the roadblocks before they become a problem.

00:06:39.000 --> 00:06:42.000

So as a divorce attorney, or as a or as a divorce attorney has a client going to divorce.

00:06:42.000 --> 00:06:53.000

I want to tell my clients meet with you before anything is finalized regarding the home.

00:06:53.000 --> 00:06:54.000

Absolutely.

00:06:54.000 --> 00:06:57.000

Meet with me, and figure out what your options are.

00:06:57.000 --> 00:07:03.000

Absolutely, and it goes into finding out what their goals and needs are.

00:07:03.000 --> 00:07:04.000

Always. That's how I start my consultation with clients.

00:07:04.000 --> 00:07:09.000

I started with, what are your calls? If this was a perfect world, and this was a perfect outcome out of your dissolution, what!

00:07:09.000 --> 00:07:16.000

We'll like to see happen when it comes to the home.

00:07:16.000 --> 00:07:25.000

Either the marital home or your plants. After the divorce is done, and so we start with the goals and then we work backwards.

00:07:25.000 --> 00:07:26.000

There's a bit. Oh, no! Go ahead.

00:07:26.000 --> 00:07:28.000

Okay, so like, go ahead. I was, I was gonna say, so like, could you give us some examples of?

00:07:28.000 --> 00:07:41.000

I guess you know what are the questions or the hot topics that people going to divorce come to you with?

00:07:41.000 --> 00:07:46.000

Absolutely. So there's 2 parts to that 2 answers to that question.

00:07:46.000 --> 00:07:50.000

And I'm I want. I would love to address both because they're really important.

00:07:50.000 --> 00:07:51.000

I'm going to start. What a hot topics are!

00:07:51.000 --> 00:07:56.000

Then I'm going to tell you how I address those meaning.

00:07:56.000 --> 00:07:57.000

Okay.

00:07:57.000 --> 00:08:05.000

My process, the hot topics that I see that I that I have conversations on a regular daily basis about our assimable loans.

00:08:05.000 --> 00:08:22.000

Can I assume the current loan? A lot of folks have really great interest rates because they refinance, or they purchased during the time when rates were in the low threes.

00:08:22.000 --> 00:08:23.000

Yeah.

00:08:23.000 --> 00:08:24.000

Maybe even the high twos, or perhaps for but now what we've seen, especially at the end of last year and earlier this year, we've seen rates in the seventh.

00:08:24.000 --> 00:08:38.000

They're starting to really normalize. Now we are quoting in the fives again, which is really great, but still, that's a lot higher than let's say, a 3% interest rate.

00:08:38.000 --> 00:08:39.000

Hey! Hi!

00:08:39.000 --> 00:08:44.000

And that makes a huge difference on a person's budget.

00:08:44.000 --> 00:08:45.000

Yeah.

00:08:45.000 --> 00:09:02.000

Monthly budget, so that's a that's a really really important question to address whether or not a small balloons are an option and if they're not, what happens if one party is or it has a limited time to for example, refinance, the more ancient into their name and maybe pay

00:09:02.000 --> 00:09:03.000

Right.

00:09:03.000 --> 00:09:13.000

out that departing spouse, or just take over the loan and if they don't do it within a specified amount of time, then they have to sell the house and thus lose the marital home.

00:09:13.000 --> 00:09:20.000

So our happens in those cases. When, for example, one of the spouse who wants to keep the house may not qualify to refinance.

00:09:20.000 --> 00:09:28.000

Are there options? What did they look like? And how was it departing spouse, protected in such a situation?

00:09:28.000 --> 00:09:35.000

Those are are really important topics that that we addressed on a daily basis.

00:09:35.000 --> 00:09:39.000

Okay. And that's the the assumable Loan.

00:09:39.000 --> 00:09:46.000

And I as like if I'm a wife, and I'm divorcing my husband and I want to take over the mortgage.

00:09:46.000 --> 00:09:47.000

I need to come to you. And first I have to figure out, can I assume this loan because we have a 3% interest rate?

00:09:47.000 --> 00:09:54.000

And now the interest rates at 6%. Here's what I'm making.

00:09:54.000 --> 00:09:59.000

Can I afford this? So so so me walk through this?

00:09:59.000 --> 00:10:02.000

So assuming I can't assume the loan.

00:10:02.000 --> 00:10:03.000

Yes.

00:10:03.000 --> 00:10:06.000

What's what do we do next?

00:10:06.000 --> 00:10:09.000

Well, what's important to understand is that there's 2 types of.

00:10:09.000 --> 00:10:10.000

Okay.

00:10:10.000 --> 00:10:18.000

And when it comes to a divorce, that the great thing is that there is protection for consumers.

00:10:18.000 --> 00:10:24.000

If let's say there, let's say this thing spouse, so you'll be the same spouse in this case.

00:10:24.000 --> 00:10:26.000

So Lonnie gets to keep the house.

00:10:26.000 --> 00:10:27.000

That's what it's called the terminology.

00:10:27.000 --> 00:10:32.000

I'm the same spouse.

00:10:32.000 --> 00:10:34.000

Okay.

00:10:34.000 --> 00:10:35.000

Okay. And then.

00:10:35.000 --> 00:10:38.000

It's just. It's what we are, sort of using as a layman's term to differentiate it and explain the scenarios to our clients.

00:10:38.000 --> 00:10:46.000

So there might be a more advanced way to say it, and I think that'll be the person assuming that interest or the assumer in interest.

00:10:46.000 --> 00:10:49.000

But for my purposes I'll just say this thing, spouse in the departing.

00:10:49.000 --> 00:10:56.000

I like it, I think, and then you said the other spouse, is called the Departing Spouse.

00:10:56.000 --> 00:10:57.000

That's what I refer to them as yes.

00:10:57.000 --> 00:11:03.000

Okay. Okay, so let's go ahead. I'm the stain spouse.

00:11:03.000 --> 00:11:08.000

Let's say you are the staying spouse. You have 2 options as far as Auma balance.

00:11:08.000 --> 00:11:19.000

Go the first. The first option is called a legal assumption, and the second option is call a qualified assumption, and it's important to know the distinction between the 2.

00:11:19.000 --> 00:11:30.000

A legal, a legal assumption is when you are awarded, a home that has a mortgage attached to it, and you're perhaps have been, have both been on the mortgage.

00:11:30.000 --> 00:11:37.000

But now that departing spouse wants to go on and do something else, so what happens?

00:11:37.000 --> 00:11:51.000

Once the lender finds out that there's been a divorce, and the other spouse that the party's house has left the residence, and a lot of cases they would sort of accelerate the due on sale clause.

00:11:51.000 --> 00:11:55.000

Except for instances of very limited assistance, including divorce.

00:11:55.000 --> 00:12:05.000

When the guard stage your main act, the Depository Act of 1982, comes into play, and that prevents lenders from accelerating the do on sale costs.

00:12:05.000 --> 00:12:13.000

And he basically allows the same spouse. Someone like you to keep the Morgan under the same terms.

00:12:13.000 --> 00:12:22.000

Without having to give a financial disclosure and to qualify financially as long as you make your monthly payments on a regular basis.

00:12:22.000 --> 00:12:23.000

Okay.

00:12:23.000 --> 00:12:36.000

So that's a legal assumption. And in that case both spouses stand alone, and in a minute I'll talk about the role and how to protect that the party spouse from those risks.

00:12:36.000 --> 00:12:56.000

Let's compare that with a quadratic assumption, a qualified assumption is, let's say, Lonnie, you and your spouse are both on the mortgage, but you are able to apply and receive a qualified assumption meaning that now the loan is entirely taken out of your your former spouses name you are

00:12:56.000 --> 00:13:00.000

the one who's a hundred percent financially responsible.

00:13:00.000 --> 00:13:03.000

The longest transferred into your name alone, and from now on that is only your loan.

00:13:03.000 --> 00:13:10.000

You get to keep the same interest rate as before, the turn might reset.

00:13:10.000 --> 00:13:12.000

So if you were perhaps 3 years into a 30 year term.

00:13:12.000 --> 00:13:16.000

Okay.

00:13:16.000 --> 00:13:17.000

Yeah.

00:13:17.000 --> 00:13:24.000

Now you're restarting that 30 year term you might be able to take over add your 27. So all that depends.

00:13:24.000 --> 00:13:25.000

Yeah.

00:13:25.000 --> 00:13:29.000

That is a qualified assumption, and that's what most folks are hoping to get. And that is what I sort of refer to as the unicorn of lending.

00:13:29.000 --> 00:13:37.000

The unicorn is because this whole entire time, right when we're when we, as attorneys, are drafted our legal documents and we're talking about how sustain spouse has to apply for refinance.

00:13:37.000 --> 00:13:53.000

They've got 2 years. When I'm actually talking about is they need to do a qualified assumption because they're trying to assume the mortgage get the husband's name off. So.

00:13:53.000 --> 00:14:00.000

And then the debt is all, and like my name now, and that's this qualified assumption is actually called the Unicorn mortgages.

00:14:00.000 --> 00:14:04.000

Like I I don't. Why cause I think that's okay.

00:14:04.000 --> 00:14:05.000

What?

00:14:05.000 --> 00:14:18.000

Because it's so rare it ever seldom work the qualified assumption to actually assume a loan, not refinance, not refinance it into your name, which is what most people do, but assume. The loan of the current interest rate is really rare first, of all, yeah, yeah.

00:14:18.000 --> 00:14:24.000

Oh, okay, we would hold on a qualified assumption in the refinance or 2 different beasts.

00:14:24.000 --> 00:14:28.000

By 2 separate things, 2 separate processes, absolutely.

00:14:28.000 --> 00:14:30.000

That's why you're here. Okay. So the qualified assumption, okay, I get it. Now.

00:14:30.000 --> 00:14:42.000

So you're saying you're I'm basically taking over I'm basically assuming alone at this great fantastic tuper interest rate.

00:14:42.000 --> 00:14:44.000

But that's hard to do. You're saying.

00:14:44.000 --> 00:14:52.000

It is really hard to do. It's not impossible. It's generally allowed for government backlans, such as Va.

00:14:52.000 --> 00:14:55.000

For a veteran or Fha or Usda, which is mostly farmland.

00:14:55.000 --> 00:15:19.000

So if they are, if they fall within those government back types of loans which make up about 18% of all the loans out there, then generally they will apply for they will qualify for an assumption assuming that they can show financially that they also qualify for that process.

00:15:19.000 --> 00:15:31.000

Oh, man, that's why it's tough then. Huh?

00:15:31.000 --> 00:15:32.000

Wow!

00:15:32.000 --> 00:15:36.000

It is really tough. In addition, the majority of the loans will be conventional loans, which generally do not qualify for an assumption unless the lender makes an exception.

00:15:36.000 --> 00:15:42.000

Okay.

00:15:42.000 --> 00:15:48.000

Yeah.

00:15:48.000 --> 00:15:49.000

Okay.

00:15:49.000 --> 00:15:51.000

And there are so many hopes to jump through. First of all, it's going to take about 6 months on average, to complete the process, which is a lot longer than a refinance or purchase, which are generally 30 days or a month in addition to that there isn't someone on the other side

00:15:51.000 --> 00:16:21.000

who's really managing this process. So the client himself or herself is going to have to be really organized, really precise, be the one that always checks in and finds out what is the next step, by when who's going to do it what needs to be they also have to make sure they qualify financially

00:16:21.000 --> 00:16:22.000

Okay.

00:16:22.000 --> 00:16:30.000

which is another big step. And so, even if they were to keep the home through or the lawn through an assumption, the financial planning for a divorce still is really really important, because if they're not set up correctly, let's say they're able their loam is assumable.

00:16:30.000 --> 00:16:31.000

Okay.

00:16:31.000 --> 00:16:34.000

But they don't qualify financially. It's really useless so the financial piece is still really important.

00:16:34.000 --> 00:16:41.000

In addition to that, there has been a lot of paid and switch action.

00:16:41.000 --> 00:16:48.000

Axa have been. We've seen in the mortgage industry that I really want to warn clients against.

00:16:48.000 --> 00:16:53.000

So what happens is a lender will say to a client, yes, the Sloan is assumable.

00:16:53.000 --> 00:16:54.000

Okay.

00:16:54.000 --> 00:16:56.000

Here's an assumption package. Go ahead and start out.

00:16:56.000 --> 00:17:04.000

The process, they fill it out. They generally have to pay for fee, and what I've been hearing has been around $1,200 plus.

00:17:04.000 --> 00:17:15.000

Generally there is an appraisal that has to be done, so the cost goes to about 2,000 between one and $2,000, and they go through this long process in their told yes, your loan is a sumable.

00:17:15.000 --> 00:17:21.000

It's going to take a while, and they, proceed thinking that, okay, I'm going to be set.

00:17:21.000 --> 00:17:25.000

I'm going to be able to keep the Sloan out to 3% interest.

00:17:25.000 --> 00:17:34.000

Then they get their first loan estimate, and when they look at it the interest rate is not 3%, but it's maybe 5.5%.

00:17:34.000 --> 00:17:35.000

And they call up the lender, and they say what happened.

00:17:35.000 --> 00:17:39.000

Oh, well, actually, that's not a way we can offer you.

00:17:39.000 --> 00:17:43.000

But look, we're offering you this rate with these costs.

00:17:43.000 --> 00:17:45.000

So it's really a beta and switch that happens.

00:17:45.000 --> 00:17:54.000

That is so unethical, and I'm really waiting to see what the regulars are going to do, how they're going to stop this from happening.

00:17:54.000 --> 00:18:10.000

It doesn't happen to everyone, but it happens often enough where in all the time that I've been helping clients and I'm here as a resource team, I haven't seen a single individual being able to successfully assume a loan at the interest rate, that they originally had.

00:18:10.000 --> 00:18:11.000

Oh, my goodness gracious! Okay, so what can't?

00:18:11.000 --> 00:18:18.000

What can we do next? Cause I didn't meet the qualifier assumption.

00:18:18.000 --> 00:18:19.000

What can we do next?

00:18:19.000 --> 00:18:25.000

Yes. So then you as the same spouse, will have a couple of options.

00:18:25.000 --> 00:18:39.000

One is, go forward with the legal assumption. That is, when those spouses stay on the same loan, and so then the question becomes Oh, what about that departing spouse? The party's bus is going to want to go by his or her new place?

00:18:39.000 --> 00:18:57.000

And they don't wanna be financially obligated on the Sloan for the marital home right?

00:18:57.000 --> 00:18:58.000

What?

00:18:58.000 --> 00:19:03.000

And that comes up a lot, I'm sure there are ways in which, for of all that departing spouse can exclude or omit the current mortgage from their debt to income ratio, and that's done a couple of a number of ways the easiest way, in the most common

00:19:03.000 --> 00:19:04.000

way is, if in the divorce documents, the settlement agreement, or the Cr.

00:19:04.000 --> 00:19:11.000

2 way. It is stated very clearly that this thing smells.

00:19:11.000 --> 00:19:22.000

Pause you for months secondary. There. Cr 2 a is a common term in divorce world that we call a Cr to a settlement agreement, which is basically saying we have come to an agreement.

00:19:22.000 --> 00:19:31.000

And this is what the agreement is, and the series is essentially a way like this is a.

00:19:31.000 --> 00:19:35.000

This is a contract. This is our element contract. So people. And then they were bound by it.

00:19:35.000 --> 00:19:36.000

So people don't be aren't changing their minds afterwards.

00:19:36.000 --> 00:19:42.000

A lot of times it happens after mediation were after mediation.

00:19:42.000 --> 00:19:58.000

The Mediator will prepare a Cr. To a settlement agreement, basically capturing what the parties agreed to, and then the attorney, one of the attorneys assigned to dropped the final orders and the other turning will present so that's what we're talking about right now when we're saying

00:19:58.000 --> 00:19:59.000

you know a cr, 2, a or cr 2, a settlement agreement or cr 2, a.

00:19:59.000 --> 00:20:08.000

For short or solemn agreement. We'll talk about myself, Lonnie.

00:20:08.000 --> 00:20:14.000

Akiana is good is gonna go stay in the home and husband Jules Moell wants to get his own place.

00:20:14.000 --> 00:20:15.000

Okay, so you're saying that? Then the summer agreement can save Mr.

00:20:15.000 --> 00:20:21.000

Joe? Can. Then what?

00:20:21.000 --> 00:20:25.000

Thank you for clarifying that I sometimes forget that it is.

00:20:25.000 --> 00:20:29.000

Those are some specific legal terms. So I appreciate that.

00:20:29.000 --> 00:20:49.000

Yes, if in one of in the divorce documents, in the final of our secret, specifically stated that the staying spouse gets the Myrtle home and is a hundred percent responsible for all the costs associated with that home including the mortgage which is the principle that interests

00:20:49.000 --> 00:20:53.000

the taxes, the insurance, the hoa one is applicable.

00:20:53.000 --> 00:21:11.000

All the utilities, all of those costs, and that case most lenders well omit the current mortgage from the departing spouse says that to income, ratio and thus the departing spouse to Joe in this case to be able to go and qualify for new loan based on his and

00:21:11.000 --> 00:21:15.000

complete financial profile, not including the Sloan, that landings keeping.

00:21:15.000 --> 00:21:25.000

Okay. Well, Lisa, let me ask you this milele. So what if? What if my divorce documents just say that I, Lonnie, in responsible for the mortgage on this place?

00:21:25.000 --> 00:21:31.000

But it doesn't have the language concerning the insurance, the taxes, each ways. Is my husband still?

00:21:31.000 --> 00:21:38.000

Okay to get his own loan? Or do I have to have all of those 4 5 things?

00:21:38.000 --> 00:21:48.000

Probably he will be okay. However, to give the departing spouse a great chance where an underwriter is not going to question it.

00:21:48.000 --> 00:22:00.000

It is safer and recommended, that is spelled out very clearly that the staying spouse is going to be responsible for all of these costs.

00:22:00.000 --> 00:22:06.000

Okay.

00:22:06.000 --> 00:22:07.000

Yeah, yeah.

00:22:07.000 --> 00:22:10.000

So now there's no issue. What happens if there is some their back taxes on the property that might become an issue for the departing spouse?

00:22:10.000 --> 00:22:18.000

So if you can really clearly state who is financial, responsible, then he gives that departing spouse less hurdles to jump through.

00:22:18.000 --> 00:22:33.000

You know, that's so interesting, because if on the other side I was representing Joel in my head, and I'm looking at like Mary's attorney, you know, doing these documents I would have to say, Hey, you I want it to. I don't want it.

00:22:33.000 --> 00:22:47.000

To just say Mary is going to take over the resonance, I would have to say, Hey, you! I want it to. I don't want it to just say Mary is going to take over the resonance at 1, 2, 3, 4, 5 Robin Hood Lane, and then that's it I wanna make sure that i've putting in all these other language.

00:22:47.000 --> 00:22:52.000

That not only is Mary gonna take over the resonance of 1, 2, 3, 4, 5, Robin headlane, but she's going to pay the mortgage for that reason. She's going to pay the taxes.

00:22:52.000 --> 00:22:53.000

She's going to pay the property insurance. She's going to pay any dues.

00:22:53.000 --> 00:22:57.000

So my client, yeah, interesting. Okay?

00:22:57.000 --> 00:23:02.000

You got it. It's all about the details. You have to be very clear in you as an attorney.

00:23:02.000 --> 00:23:11.000

You. I'm sure you deal with this on a daily basis, just like with everything else in the divorce.

00:23:11.000 --> 00:23:21.000

The more clearly spelled out the easier it's going to be for these folks when they are actually putting these steps into play.

00:23:21.000 --> 00:23:24.000

Okay. Good. Point.

00:23:24.000 --> 00:23:25.000

So!

00:23:25.000 --> 00:23:36.000

Yeah, so there is one part of this that is really important, which is what happens if we have a a legal assumption, meaning that both files to stay on the loan.

00:23:36.000 --> 00:23:37.000

And yes, Joe can go out and get his his new mortgage.

00:23:37.000 --> 00:23:48.000

However, what happens if Lonnie has a glitch in her bank and she makes I like morninggage payment.

00:23:48.000 --> 00:23:57.000

That's more than 30 days late. In that case Joe's credit is going to be severely impacted by this like payment.

00:23:57.000 --> 00:23:58.000

And so that is the number one concern of divorce.

00:23:58.000 --> 00:24:13.000

And spouse is they don't wanna be taught to the actions of their former spouse, and because of that, and I'm sure I would love to hear how you and how you see this, and how you address it.

00:24:13.000 --> 00:24:18.000

It's it's probably wise to not have this go on forward.

00:24:18.000 --> 00:24:22.000

Ever but set a specific deadline a year, 2 years, you know.

00:24:22.000 --> 00:24:40.000

5 years, maybe once once the kids enter high school or finish high school, whatever that event in their qualifying event by which time the staying spouse will actually have to do a refinance and fully remove the departing spouse from that mortgage to protect them.

00:24:40.000 --> 00:24:44.000

But in the meantime, are there any protections available to Joe?

00:24:44.000 --> 00:24:53.000

And what I've seen some couples do, and this is a especially relevant in cases of collaborative lower mediation.

00:24:53.000 --> 00:25:13.000

When there is more collaboration between the 2 sides is that perhaps they have some kind of a system setup where the same spouse will prove to the departing spouse by an agreed upon date of the month let's say the tenth of the month lonnie you have to show Joe they've made the mortgage payment each month and then

00:25:13.000 --> 00:25:15.000

Joe doesn't have to worry about it. Okay, here's proof.

00:25:15.000 --> 00:25:35.000

And if you fail to to show that, then perhaps the second layer of this planning will be that you have set up a joint account with a reserve amount of one to 3 or 6 months of mortgage until can go access that account in cases in which you fail to provide proof that you've made the

00:25:35.000 --> 00:25:36.000

Hmm!

00:25:36.000 --> 00:25:43.000

mortgage, for some reason, is not made on time. Joe can access this account and make that payment.

00:25:43.000 --> 00:25:44.000

Okay.

00:25:44.000 --> 00:25:54.000

And you can have all kinds of caveats set up saying that once there is a late payment, then the sale action has to start.

00:25:54.000 --> 00:26:00.000

The process has to commence at that point, because obviously we cannot take the risk.

00:26:00.000 --> 00:26:07.000

Or who are you use the amounts, the funds in that account to set up further enforcement?

00:26:07.000 --> 00:26:19.000

But those are ways that couple sort of workout an arrangement where this thing spouse is able to keep the current mortgage in case they don't qualify for a refinance or an equity buyout.

00:26:19.000 --> 00:26:25.000

So let's talk about the refinance and the equity buy off.

00:26:25.000 --> 00:26:26.000

So!

00:26:26.000 --> 00:26:40.000

Yes, yes, I would love to talk about that. And this is a topic that I feel deserves the most time when I'm when I'm talking to clients, and even sometimes theorce professionals, because, frankly, this is not your field.

00:26:40.000 --> 00:26:54.000

You're not a mortgage professional, and there's no reason for you to know the difference between these 2 programs.

00:26:54.000 --> 00:26:55.000

Yeah.

00:26:55.000 --> 00:27:09.000

But when you set up an equity buyer, which is when one spouse is buying out the departing spouses, interest in the home, there are 2 ways, 2 separate types of loans through which you can do that.

00:27:09.000 --> 00:27:10.000

Wow!

00:27:10.000 --> 00:27:20.000

It's called an equity buyout, but you can structure it as a casha refinance, or you can structure it as a rate in terms refinance and and I wanna take a minute to explore the difference between the 2 in case folks are not familiar with what's these 2 types of launch

00:27:20.000 --> 00:27:27.000

so a cash hour. Refinance is really what it sounds like when you are able to refinance a loan.

00:27:27.000 --> 00:27:31.000

And at the same time pull out cash from the equity of their home.

00:27:31.000 --> 00:27:32.000

So let's.

00:27:32.000 --> 00:27:35.000

Yeah. So let's go to that. I have to. I have to do the equity.

00:27:35.000 --> 00:27:41.000

My home is $100,000 that I need to pay to my just starting my departing spouse.

00:27:41.000 --> 00:27:42.000

So let's work with that number.

00:27:42.000 --> 00:27:48.000

Okay, exactly. So let me explain. Let me pull up some numbers here.

00:27:48.000 --> 00:27:53.000

Alright! So we're dealing with. Sorry.

00:27:53.000 --> 00:28:01.000

Manual just went away with an equity by our structure through a cash hour.

00:28:01.000 --> 00:28:02.000

I'll share, refund.

00:28:02.000 --> 00:28:23.000

Refinance. That's important to know about a cashier refinance is that it's going to have generally higher interest rates than a rate income refinance on average, half a percent which can mean the difference between an additional 2 to $500 per month for the bar the depending on the loan

00:28:23.000 --> 00:28:24.000

amount in the interest rate.

00:28:24.000 --> 00:28:28.000

Hey? Wait? How much more per month did you say? 2 to $500 per month?

00:28:28.000 --> 00:28:33.000

Yes, that can be the difference between a cash out reference and a ritual refinance.

00:28:33.000 --> 00:28:34.000

Any?

00:28:34.000 --> 00:28:36.000

Become the higher interest rate.

00:28:36.000 --> 00:28:39.000

So that second thing is called. It's called what a rate and term.

00:28:39.000 --> 00:28:43.000

Rate and short refinance. Now I'll explain that next. So.

00:28:43.000 --> 00:28:46.000

I'm just gonna I'm running this down here.

00:28:46.000 --> 00:28:48.000

But yeah, the cash are refinance, and the rate in terms of finance.

00:28:48.000 --> 00:28:49.000

The rate in turn, refinances is still not sexy, I mean cash.

00:28:49.000 --> 00:28:56.000

I hope everybody can get that rate in terms. I'm like, good Lord!

00:28:56.000 --> 00:29:01.000

Can we have something funner to say, okay, that's just my little.

00:29:01.000 --> 00:29:20.000

The rate in Germany. Finance is what we saw a lot during the refinance boom, because this is where, when folks had this higher interest rates for to 5% and they're able to get down to a 2.7 5 with 3.2 5 somewhere in that range and so what they've done

00:29:20.000 --> 00:29:21.000

And the term, yeah.

00:29:21.000 --> 00:29:25.000

is really just change the rate meaning going from, you know, 5, 6% to a 3%.

00:29:25.000 --> 00:29:29.000

And then the term meaning that, let's say that they were.

00:29:29.000 --> 00:29:30.000

They had a 30 year loan, but they were 20 years then, and they only had 10 years left.

00:29:30.000 --> 00:29:38.000

Well, one day set up their new loan. They got to choose.

00:29:38.000 --> 00:29:42.000

They want a 10 year term a 20 year, term a 20 year term.

00:29:42.000 --> 00:29:45.000

So you did the change the rate, and you change the change. The term.

00:29:45.000 --> 00:29:56.000

But you don't get any cash up under the incidentals up to $2,000 which they could get with the rate in term refinance versus a cash refinance.

00:29:56.000 --> 00:29:57.000

Yeah.

00:29:57.000 --> 00:30:02.000

You change the rate you change the term, and then you can access up to 80% of the home's equity.

00:30:02.000 --> 00:30:07.000

Oh, okay, well, thank you for beautifully explaining that rate in terms.

00:30:07.000 --> 00:30:10.000

You just the way explained it. Help it click in my head.

00:30:10.000 --> 00:30:11.000

So, thank you so much. Okay, so.

00:30:11.000 --> 00:30:21.000

Here's the here's the part that's going to make that rating term really stand out in your mind to make it sexy, as you said, is what just like I said the cash out refinance.

00:30:21.000 --> 00:30:29.000

You can access up to 80% of the equity in a home with the right internal money, you can access up to 95% of the equity in a home which is huge.

00:30:29.000 --> 00:30:45.000

Oh, that's that's!

00:30:45.000 --> 00:30:46.000

Okay. Okay.

00:30:46.000 --> 00:30:49.000

Yes, when it comes to buying at your spouse, if you only have a hundred 1,000 worth of equity in the home and let's just say that your home is for 500,000 right, and you have your equity.

00:30:49.000 --> 00:30:59.000

So you owe 400,000 on it. So your equity is a hundred 1,000, and you have to pay out your spouse half of that which would be 50,000.

00:30:59.000 --> 00:31:12.000

Well, if you had a cash out refinance you couldn't pull out the 50,000 needed when your loan was already at 80% of month value ratio you're already at that cap of 80%.

00:31:12.000 --> 00:31:16.000

I'm done!

00:31:16.000 --> 00:31:17.000

Hmm!

00:31:17.000 --> 00:31:27.000

So you're done so if you yeah, if you only had the cash out as an option, you could not pull out in equity from the house, and unless you had other assets that you could use to buy your departing spouse to share, then you may may not have an option, and you

00:31:27.000 --> 00:31:28.000

may be forced to sell.

00:31:28.000 --> 00:31:30.000

Wow!

00:31:30.000 --> 00:31:42.000

But if you are able to qualify for a written term refinance, then you could easily go up to the 95% mark and get out the 50,000 that you'll need to pay off yourself.

00:31:42.000 --> 00:32:00.000

So let me ask you this. Do you see, more people are qualified to do the rate in term as opposed to the cash out refinery.

00:32:00.000 --> 00:32:01.000

Yeah.

00:32:01.000 --> 00:32:06.000

That's a really good question. So this is one instance that I've seen over and over when I was before I got into this line of work, and let me just give you an example of of I'll call them Jane.

00:32:06.000 --> 00:32:07.000

Let's call them Jane and Judy, so we can be fair to the, you know, can be inclusive.

00:32:07.000 --> 00:32:21.000

And Joe just for yes, yes. So Jane and Julie.

00:32:21.000 --> 00:32:22.000

Okay.

00:32:22.000 --> 00:32:23.000

They worked really hard to equally and equitably divider assets, and part of this division.

00:32:23.000 --> 00:32:25.000

They thought they were both being fair, and they were.

00:32:25.000 --> 00:32:26.000

Yeah.

00:32:26.000 --> 00:32:44.000

Part of this included a cash out, an equity buyout with a cash out that Jane had to pull out of the house to give Judy the funds, so that Judic go by her own place, and they everybody counted on this, and Judy was really set on where she's going

00:32:44.000 --> 00:32:59.000

to live, to be closer to her job. Everything was lined up, but then, when Judy and Judy asked when and talk to a mortgage professional who was not someone that was really specialized in divorce, do I qualify for a cash hour refinance?

00:32:59.000 --> 00:33:02.000

Oh, yes, you do. They went through the financial Csu before.

00:33:02.000 --> 00:33:08.000

No one ever took the time to discuss the limits with her, and actually do the planning.

00:33:08.000 --> 00:33:09.000

Yeah.

00:33:09.000 --> 00:33:15.000

So then they figured out what's fair. Oh, 6 months is fair for you to come up with this cash right?

00:33:15.000 --> 00:33:16.000

Right? 6 months, right?

00:33:16.000 --> 00:33:22.000

What they went through. The yeah, which is pretty typical from what I've seen.

00:33:22.000 --> 00:33:26.000

They go through the through. The motion. Divorce is finalized.

00:33:26.000 --> 00:33:38.000

Jane goes to apply for a refinance. Of course she's approved, but then she finds out that the Max that she's able to take out through the cache are refined is insufficient for duty.

00:33:38.000 --> 00:33:40.000

To be able to actually get a home. So now, what does she do?

00:33:40.000 --> 00:33:51.000

She basically can rescind the loan and keep her regular rate or and find, maybe sell assets, if that's even an option.

00:33:51.000 --> 00:33:57.000

Or else, Jane might have to sell that property, even though that wasn't in her plan at all.

00:33:57.000 --> 00:34:01.000

To be in a position where she no longer had her comfortable, safe place.

00:34:01.000 --> 00:34:05.000

I just. I just feel screwed. I just got screwed over.

00:34:05.000 --> 00:34:06.000

Yes.

00:34:06.000 --> 00:34:08.000

I'm Jane right now. I just got screwed over what the hack, what the heck so!

00:34:08.000 --> 00:34:17.000

Because the planning wasn't there, and no one explained, and no one even took the time to see if it was possible to help them get this structured.

00:34:17.000 --> 00:34:19.000

Oh!

00:34:19.000 --> 00:34:23.000

As a rate in terms of refinance which would have solved all their problems, and it would have been.

00:34:23.000 --> 00:34:27.000

So this is my. This is why people have to come to you.

00:34:27.000 --> 00:34:30.000

She can help you walk through this and.

00:34:30.000 --> 00:34:33.000

Set it up correctly. Yes, yes.

00:34:33.000 --> 00:34:38.000

Holy smokes this is, and you know, excuse me, cause like I jump over the place sometime.

00:34:38.000 --> 00:34:42.000

But I think what's important to know is not only you looking at these different options for people walking them through it, seeing can you qualify?

00:34:42.000 --> 00:34:55.000

But the big piece of view is that financial planning where you had mentioned something about okay?

00:34:55.000 --> 00:34:59.000

Well, you know, lists structure things in terms of maybe spouse or maintenance, or something else where we can bump up your income right?

00:34:59.000 --> 00:35:08.000

Can. Can you talk us through that? Because I know I'm not explaining.

00:35:08.000 --> 00:35:10.000

Yes, absolutely so. Just to tie in the fire conversation.

00:35:10.000 --> 00:35:12.000

Yeah.

00:35:12.000 --> 00:35:32.000

Really quick for Jane to have been able to qualify for the red interim refinance. There's there's a number of criteria that had to be met, but the one preventable piece of that is this equity buyout had to be specifically addressed in a very certain

00:35:32.000 --> 00:35:33.000

Hmm!

00:35:33.000 --> 00:35:34.000

very strict way in the divorce document. It had to be addressed independently.

00:35:34.000 --> 00:35:46.000

Either the Homestead section or as it's its own paragraph, and if that wasn't there it would have been really hard for them to structure this as a rate in terms of refinance.

00:35:46.000 --> 00:35:47.000

Oh!

00:35:47.000 --> 00:35:51.000

They both had to be on title for 12 months of theirs.

00:35:51.000 --> 00:35:52.000

Wow!

00:35:52.000 --> 00:35:56.000

A number of things that had to have happened to get, to get Jane to qualify, to structure it as a right in terms so exact.

00:35:56.000 --> 00:36:00.000

What you said. Money, that planning the events planning is crucial in this.

00:36:00.000 --> 00:36:01.000

Well, so like what has to gone the divorce document?

00:36:01.000 --> 00:36:13.000

So the person, the same files can qualify for the rate in term refinance.

00:36:13.000 --> 00:36:14.000

Okay.

00:36:14.000 --> 00:36:28.000

It has to be addressed specifically, independently of any other asset division, either in the home section or in the Asset Division Section, and he has to say that Lonnie or Jane is going to be keeping the real property at the Address and They're going to

00:36:28.000 --> 00:36:35.000

buy out their spouse, or the other owner, and here are the terms, and this is how it's going to happen.

00:36:35.000 --> 00:36:37.000

And there's a lot more things that go into that.

00:36:37.000 --> 00:36:51.000

For example, if you set up as a percentage instead of as a dollar amount that may save the couple from having to renegotiate the price later because, as you know, Lonnie property prices will go up and down.

00:36:51.000 --> 00:37:08.000

And so when that lender has to do their own appraisal, if they had set up the division as a proced, let's say 50% or 40%, the goes to the departing spouse, even if that value goes up and down slightly it's not going to change and how much the party.

00:37:08.000 --> 00:37:15.000

spouse, gets. But if you set up as a dollar amount, and now all of a sudden, the property is worth a lot less.

00:37:15.000 --> 00:37:22.000

Well, how was the thing spouse going to come up with the additional funds?

00:37:22.000 --> 00:37:23.000

Okay, that's.

00:37:23.000 --> 00:37:29.000

Because that amount changes so there's always a little details that can that I work with the couple and the divorce team and help them set this up.

00:37:29.000 --> 00:37:36.000

So whenever I see that there's a issue, and how this is structured, and I will maybe send a message and work with the team.

00:37:36.000 --> 00:37:51.000

Ultimately, I don't give it. I don't give legal advice I stay in my lane, but I am a resource for the divorce attorney and for the couple to reach a resolution, and so, whenever I see issues that might become promised down the road, I sort of interject and say hey?

00:37:51.000 --> 00:38:01.000

Can we take a look at this? Is there a different way to maybe structure this or explain it so that these clients will have an issue down the line?

00:38:01.000 --> 00:38:05.000

Because again your money, you're not expected to be a mortgage.

00:38:05.000 --> 00:38:06.000

Right.

00:38:06.000 --> 00:38:07.000

Professional. That's not you do enough as it.

00:38:07.000 --> 00:38:19.000

Is. This is not something that you need to be an expert in, but this is why you have people like me who can help with that part and help with the planning and help make sure that all the Ts are crossing is are dotted.

00:38:19.000 --> 00:38:25.000

And it's so interesting that you said in terms of just even instead of using a dollar amount right?

00:38:25.000 --> 00:38:31.000

Instead of saying 50,000 save 50% of the homes equity rather than Dollar Mountain.

00:38:31.000 --> 00:38:53.000

And I think you know, we, as attorneys, were so used to saying the dollar amount, because traditionally, what happened was that the Homes equity would increase in value and we're worried if we sa a percentage that then that departing state then gets more as that homes equity increases but on the

00:38:53.000 --> 00:39:00.000

flip side. You're you know what? At the home? It's always at risk, because where the home equity goes down. And now you can't.

00:39:00.000 --> 00:39:05.000

Absolutely and it's going to depend your absolutely right on it's on a case-by-case basis.

00:39:05.000 --> 00:39:11.000

Okay. They're in the.

00:39:11.000 --> 00:39:15.000

Hmm!

00:39:15.000 --> 00:39:16.000

Yeah, that's the option.

00:39:16.000 --> 00:39:18.000

It depends on what's happening with the houses depend depends on what's happening with the market, and I think what's important to clarify is that's A's an option in some cases that might make a big difference.

00:39:18.000 --> 00:39:28.000

Where, if the couple is, is really set on a specific dollar amount for specific reasons, and for sure, we're going to go the dollar amount.

00:39:28.000 --> 00:39:29.000

But in case.

00:39:29.000 --> 00:39:38.000

Right, yeah, we're just really quickly. It. It could also depend on just in terms of like what the term we're talking about for the refinance, whether it's like 6 years or 5 years.

00:39:38.000 --> 00:39:42.000

So I love how you in family law. The answers always.

00:39:42.000 --> 00:39:45.000

It depends. It applies here, too.

00:39:45.000 --> 00:39:46.000

Absolutely. Yeah. And again, we are one piece of the puzzle.

00:39:46.000 --> 00:39:58.000

We don't make the rules we work with you with a divorce team, with a divorce attorney to make sure that the advice that we give the planning that we give actually helps the process.

00:39:58.000 --> 00:40:04.000

And it's not a stickler that it's going to slow down your efforts towards a resolution.

00:40:04.000 --> 00:40:05.000

Yeah.

00:40:05.000 --> 00:40:11.000

Wow, so my next question was and I just forgot it.

00:40:11.000 --> 00:40:12.000

It's about. It was about support income.

00:40:12.000 --> 00:40:15.000

Yeah, cause you're saying so many good things. Okay?

00:40:15.000 --> 00:40:16.000

So now you're walking me through the process of Hey, Lonnie?

00:40:16.000 --> 00:40:21.000

This is how we can do your income so you can. So we're helping me to qualify for the read in term refinance.

00:40:21.000 --> 00:40:27.000

So!

00:40:27.000 --> 00:40:40.000

Well, just seeing what your options were right. So one of the biggest planning portions when it comes to divorcing spouses is the support piece, because your W.

00:40:40.000 --> 00:40:41.000

2 job is going to be your income is what it is.

00:40:41.000 --> 00:40:48.000

Your self-employment is what it is that we don't mess with that we we wouldn't want to.

00:40:48.000 --> 00:40:49.000

Be meddling into mortgage fraud in any way right?

00:40:49.000 --> 00:41:04.000

So your income as what it is, child support is based on a financial analysis that's not something that you can change, although the wording on the child support award in the documents that can make a difference.

00:41:04.000 --> 00:41:06.000

And if we have time, I we can go on to that.

00:41:06.000 --> 00:41:12.000

But the one piece of income that is sort of Nicos, shareable and adjustable.

00:41:12.000 --> 00:41:16.000

It's going to be the support income. The spouses support income.

00:41:16.000 --> 00:41:27.000

And that is because your income first of all, has to be awarded for long enough periods to be deemed qualified income from mortgage purposes.

00:41:27.000 --> 00:41:34.000

So let me yeah, spouse the support. Let me give you an example of one of the first cases that I've ever had that really changed the way that I looked at this planning process.

00:41:34.000 --> 00:41:38.000

Her name was Alice. She was a single single mom had young kids at home.

00:41:38.000 --> 00:41:56.000

She worked really hard to win the divorce, the home and divorce, because she wanted to keep keep her young kids in the home, not have to move them, and she knew she knew that she needed additional income.

00:41:56.000 --> 00:42:05.000

So she worked really hard to get spousal support for 36 months at a really good amount, and then she went out and got a job a part time job.

00:42:05.000 --> 00:42:09.000

And then she had 6 months to refinance the house into her name.

00:42:09.000 --> 00:42:28.000

Wow!

00:42:28.000 --> 00:42:29.000

Hmm!

00:42:29.000 --> 00:42:32.000

Okay. All that look great. What? She went through the process, and then she found out that for the spousal support to be allowed for us qualifying income, it had to be first of all for conventional loans be received for 6 months before it's being qualified and then it has to continue for another 36

00:42:32.000 --> 00:42:45.000

Oh!

00:42:45.000 --> 00:42:46.000

Huh!

00:42:46.000 --> 00:42:49.000

months, which means at a minimum. Alice needed 42 months of support income to be able to use this really important stream of income for qualifying purposes, or else we had to disregard it, which is what happened in this case.

00:42:49.000 --> 00:42:50.000

Oh no!

00:42:50.000 --> 00:43:12.000

And I remember that that phone call where I had to explain to her that there is no way that this will happen within 6 months, because she didn't have the required receipt period and her and once she established that, then she didn't have the additional 4 36 months, because her entire

00:43:12.000 --> 00:43:16.000

support was only 36 months, and she needed a minimum of 42 and.

00:43:16.000 --> 00:43:22.000

And that's just standard across the board like it's 22 months, 6.

00:43:22.000 --> 00:43:23.000

Oh, my! Gosh!

00:43:23.000 --> 00:43:27.000

For fha loans, which are the government back loans. You.

00:43:27.000 --> 00:43:34.000

You can do 3 months, prefer receipt and 36 months of continuance.

00:43:34.000 --> 00:43:35.000

Well!

00:43:35.000 --> 00:43:40.000

So that's a minimum of 39 months. But we try to stay away from everything else whenever possible, because they are more expensive.

00:43:40.000 --> 00:43:49.000

They have enough from funding fee, and then also a require private mortgage insurance like makes a loan more expensive for the client.

00:43:49.000 --> 00:43:56.000

Whenever possible we try to stay away from fha loans so it's always better to have for a refinance a minimum of 42 months, really, 43 months.

00:43:56.000 --> 00:44:16.000

But you want because you want to have a month of cushion in case anything happens and then Lonnie, if for clients who need to purchase the property, we need an even longer time period, because we need a few months as a cushion.

00:44:16.000 --> 00:44:29.000

For the client to go out and start shopping for property put in offers, negotiate the offers, have the offer accepted, go on the contract, and then make sure that loan closes. So if we only give them 42 months.

00:44:29.000 --> 00:44:35.000

That means that as soon as the 6 months is done they need to be that loan ready to close.

00:44:35.000 --> 00:44:39.000

And it's really hard to time it when they're born out.

00:44:39.000 --> 00:44:47.000

And what is turning out to to be a market that's heating up again where we're seeing multiple offers again.

00:44:47.000 --> 00:44:52.000

And clients need that additional time to be able to shop and find the right place before they make an offer.

00:44:52.000 --> 00:44:57.000

So just to get this clear. So we're going back to the Alice situation.

00:44:57.000 --> 00:45:08.000

So Alice needed to show that she had this powerful support income for 6 months, and then she was gonna get it for another 36 months on top of that.

00:45:08.000 --> 00:45:09.000

Huh? Okay.

00:45:09.000 --> 00:45:10.000

You got it? Minimum of 42 months. Assuming there's no glitches anywhere.

00:45:10.000 --> 00:45:16.000

Assuming that the credit was perfect and didn't need it to be upgraded.

00:45:16.000 --> 00:45:22.000

Assuming that everything worked out perfectly the minimum amount she needed was 42 months for her to be able to use her.

00:45:22.000 --> 00:45:27.000

Her supporting come to qualify for that refinance.

00:45:27.000 --> 00:45:35.000

So okay. So so what happened to her? Because since she didn't meet that?

00:45:35.000 --> 00:45:45.000

You have.

00:45:45.000 --> 00:45:46.000

Oh!

00:45:46.000 --> 00:45:51.000

Yes, even though she had a part-time job again, she needed to have a a longer term period, and she didn't meet that period, so she unfortunately had to sell pick she tried to reopen, to have her basically agreement modified to help.

00:45:51.000 --> 00:46:07.000

Additional time, but the spouse was not focused to that and she was forced to sell, and she was devastated because she spent so much money on this this process.

00:46:07.000 --> 00:46:12.000

Thinking that she's going to keep the home for the kids and she wasn't able to.

00:46:12.000 --> 00:46:16.000

And it was a really hard, breaking conversation, one that stays with me now. Years later.

00:46:16.000 --> 00:46:27.000

Yeah, cause you're just cause in your I mean. Obviously she came to you after the fact, and in your head you can't help but think, oh, I still wish you saw me beforehand.

00:46:27.000 --> 00:46:28.000

Yes.

00:46:28.000 --> 00:46:31.000

We could have prevented. Oh, goodness gracious, okay, yeah.

00:46:31.000 --> 00:46:33.000

Tough story, Tester. Oh, my gosh! That's why, even more so.

00:46:33.000 --> 00:46:34.000

It's so important that people go and see 2 plants.

00:46:34.000 --> 00:46:42.000

Maybe get stuck like poor Alice did.

00:46:42.000 --> 00:46:43.000

Yeah, please.

00:46:43.000 --> 00:46:52.000

Yeah, let me give you a success story, though, so that.

00:46:52.000 --> 00:46:53.000

Okay.

00:46:53.000 --> 00:47:03.000

Alright. Let's I'm going to call this client Nick, Nicolai. So Nicolai was also a single dad, and he had income, but he was mostly a stay at home.

00:47:03.000 --> 00:47:11.000

Dad and they were living in the same house. They they did have an investment property that they sold.

00:47:11.000 --> 00:47:19.000

So there was a significant amount of assets that came through that was he was going to receive as a settlement, but for now they're living in the house.

00:47:19.000 --> 00:47:22.000

He was going to get those spells to support and child support.

00:47:22.000 --> 00:47:27.000

But again, remember that 6 months rule needing to establish preferred receipt.

00:47:27.000 --> 00:47:30.000

Well, during this time, what?

00:47:30.000 --> 00:47:35.000

And again you said the 6 months rule needing to establish before we see before we see.

00:47:35.000 --> 00:47:43.000

Proof of receipt. So for the spousal support and child support to be deemed qualified income for mortgage purposes.

00:47:43.000 --> 00:47:49.000

The receiving spouse needs to show proof or receipt for 6 months.

00:47:49.000 --> 00:47:50.000

Proof of receipt for 6 months. Scott.

00:47:50.000 --> 00:47:56.000

Yeah. It's called the 6 36 row, and it has to do with consistency and stability standards.

00:47:56.000 --> 00:48:12.000

For in the learning industry, but to really simplify it, as that, we need to show that the receiving spouse has been regularly and clearly receiving the support income for 6 months, and it's going to continue for 36 months.

00:48:12.000 --> 00:48:13.000

Okay, 6, 6, 3, 6, rule, okay, fine. Okay, cool.

00:48:13.000 --> 00:48:26.000

So 6 you got it? Yes. So in this case, Nick, he was going to start savings spells, so support and child support all of that is going to happen before now.

00:48:26.000 --> 00:48:42.000

There are still living in the house that divorce was going to be finalized within 30 days, and their relationship was deteriorating day by day to the point where it was becoming really toxic.

00:48:42.000 --> 00:48:43.000

Oh!

00:48:43.000 --> 00:48:45.000

On the verge of becoming abusive, and he needed to move, and he was.

00:48:45.000 --> 00:48:51.000

He was the primary parent who he had the kids most of the time, and his options are really limited.

00:48:51.000 --> 00:48:58.000

He would have to go out and rent, and it was really hard to find a month to month, place to rent, or even a 6 months.

00:48:58.000 --> 00:49:19.000

Most places required a year, and he really didn't wanna do that, because if he did, his time period of purchasing a place, what he's supporting come would have run out would have been really limited right, because he only had 6 plus 36 plus a few months, of cushion to buy something so if

00:49:19.000 --> 00:49:22.000

he signed a one year contract even a 6 month contract.

00:49:22.000 --> 00:49:30.000

To rent a place he would have missed that on the window that he had to purchase the property in his name, and so what to do, I was able to work with his attorney.

00:49:30.000 --> 00:49:40.000

We brought in an estate planning attorney, have someone that I really trust and respect, and a financial planner, which I don't do any of those jobs.

00:49:40.000 --> 00:50:00.000

And we create a specific type of trust where Nick Nicola was able to put in a certain amount in this case was, I believe, a hundred 50,000 out of the 300 hills getting from the cell of the home, and we turn that into qualified income, and we were able to work.

00:50:00.000 --> 00:50:10.000

So simultaneously with him as he was finalizing his divorce, and his divorce was finalized on the 20 fifth of the month, and he got the keys to his new place on the 20 eighth of the month would that have to wait the 6 month.

00:50:10.000 --> 00:50:19.000

What?

00:50:19.000 --> 00:50:20.000

Yes.

00:50:20.000 --> 00:50:22.000

What wait have to wait for 6 months because guys did this trust.

00:50:22.000 --> 00:50:26.000

Yes, and it was more advanced. It was more complicated.

00:50:26.000 --> 00:50:29.000

There were additional costs you had to pay. The attorney I don't recall.

00:50:29.000 --> 00:50:41.000

I think he was $1,100 and and the divorce attorney had to work with us and be willing to put a specific language again and of course decreased.

00:50:41.000 --> 00:50:42.000

Oh, my God!

00:50:42.000 --> 00:50:56.000

Specifying this trust, we had to make sure the funds were right directly from the community property into the trust, and not send over to the client, because once the funds are in the client's possession, the client couldn't fund his own trust you wouldn't that wouldn't have worked so

00:50:56.000 --> 00:50:57.000

Oh, okay.

00:50:57.000 --> 00:51:05.000

there were a lot of moving pieces. There's a lot of planning but in this case it was so worth it because it didn't escalate the relationship.

00:51:05.000 --> 00:51:06.000

The the issue. It didn't become a domestic violence situation.

00:51:06.000 --> 00:51:15.000

They were able to get out of the house, get into a property, not pay rent, which is a hundred percent interest.

00:51:15.000 --> 00:51:21.000

Get into a hot that that they loved, and then everybody walked away, and that was huge.

00:51:21.000 --> 00:51:24.000

And so the planning that's an example of the planning work beautifully.

00:51:24.000 --> 00:51:29.000

Oh, my gosh! That is just! I feel like crying.

00:51:29.000 --> 00:51:38.000

I feel like crying cause I know how hard it is, and how much work, and just to kind of hear that kind of success story.

00:51:38.000 --> 00:51:45.000

It just like, Wow, I'm just pulling away, and a very nerdy sort of divorce, financial.

00:51:45.000 --> 00:51:46.000

That's amazing. That's.

00:51:46.000 --> 00:51:52.000

Yes, and I believe this attorney was a guest on one of your podcasts. Earlier.

00:51:52.000 --> 00:51:53.000

I know what you're talking about wheels and trust Attorney Canola Olstrom.

00:51:53.000 --> 00:51:58.000

Yes.

00:51:58.000 --> 00:52:01.000

Yes, you know what I'm gonna be surprised because he is very, very smart.

00:52:01.000 --> 00:52:05.000

Very smart. Yup.

00:52:05.000 --> 00:52:06.000

Yes.

00:52:06.000 --> 00:52:13.000

He's got Lem and tax good trust. Yeah, there you go well, you guys are just what talked about a wonder team between you and him.

00:52:13.000 --> 00:52:17.000

Oh, goodness, wow! That's just so much information.

00:52:17.000 --> 00:52:21.000

My mind is just kind of blown away right now.

00:52:21.000 --> 00:52:34.000

Did we cover? Gosh, I'm speechless.

00:52:34.000 --> 00:52:35.000

Oh!

00:52:35.000 --> 00:52:38.000

We covered a lot what we haven't talked about as my process sort of how I put this into, how it actually works in a practical way.

00:52:38.000 --> 00:52:41.000

So if we have a few minutes I'll love to chance to cover that.

00:52:41.000 --> 00:52:42.000

So folks know what to expect.

00:52:42.000 --> 00:52:45.000

Oh, my God! Please tell us about your process.

00:52:45.000 --> 00:52:57.000

Sure. Thank you. So a referral come to me and generally comes from a divorce professional though I do have referrals from from past clients who have friends who are not going through a divorce, and they call me and say, can you do the same thing?

00:52:57.000 --> 00:53:00.000

You've done for me, for my friend, or for my cousin, and I absolutely love to help.

00:53:00.000 --> 00:53:05.000

Let's say, referral comes to me. We set up an initial consultation that takes a little bit of time.

00:53:05.000 --> 00:53:11.000

It takes a good 45 min to an hour, and during that time I talk about their goals just like I mentioned earlier.

00:53:11.000 --> 00:53:16.000

If this was a perfect world, what would you like to see happen because their goals really matter?

00:53:16.000 --> 00:53:24.000

I can see 5 different options for them, but if they only want, you know this other option.

00:53:24.000 --> 00:53:32.000

Well, I can tell him ahead of time, you know. I'm really sorry, Lonnie, but that's not really within the options available to you.

00:53:32.000 --> 00:53:37.000

Can we reassess? But if it's one of the options that we can work, then we'll focus on that.

00:53:37.000 --> 00:53:42.000

So their goals are really important. It's not about what I want to do, what I think.

00:53:42.000 --> 00:53:44.000

It's still overwhelming. My client, happy!

00:53:44.000 --> 00:53:56.000

And within that conversation I also talk about budget, because yes, I can qualify a client for a mortgage, for refinance or purchase, that whatever purchase, point, or price.

00:53:56.000 --> 00:54:06.000

But then I mean, that's I'll have to eat ramen for the next year and or 5 years, and that's not so.

00:54:06.000 --> 00:54:10.000

The budget is really important. So far out there goals for another budget.

00:54:10.000 --> 00:54:17.000

Then I go on through and do a full analysis, and I gather their whole financial profile information about their divorce proceedings.

00:54:17.000 --> 00:54:20.000

What type of divorce we're seeing is that they said.

00:54:20.000 --> 00:54:24.000

Is that litigation is a mediation is a collaborative.

00:54:24.000 --> 00:54:29.000

Find out who their divorce demons, what their deadlines are, where they are in the process, and then I create a very detailed report, and let it that goes along with it.

00:54:29.000 --> 00:54:43.000

And this is what's different about me, because, having been an attorney, I bring that really analytical side and also educational side to my clients.

00:54:43.000 --> 00:54:47.000

I love being able to explain these concepts to them, educate them, and be a resource, and the nice thing is that I don't charge.

00:54:47.000 --> 00:54:56.000

There's no costs of the clients who really at ease being able to ask me questions about.

00:54:56.000 --> 00:55:01.000

Explain to me what a rate in term refinances. How is it different than a cash out?

00:55:01.000 --> 00:55:02.000

How can we do it and not feel that they are taking up the attorney's time?

00:55:02.000 --> 00:55:10.000

That could have been better used on something that's more important to their case. So they feel.

00:55:10.000 --> 00:55:14.000

I can't explain it like how you do. I'm I'm not saying like you.

00:55:14.000 --> 00:55:19.000

Oh, oh, you're smart! Yeah, but you're not in my spring mortgages right again.

00:55:19.000 --> 00:55:20.000

Are, you are!

00:55:20.000 --> 00:55:25.000

Yeah, don't need to be so. I am able to create this report in this letter.

00:55:25.000 --> 00:55:36.000

I send it to them, and it's very detailed, and then we have a follow-up session where I actually share my screen, and I go through this report in detail, and we cover a lot of things.

00:55:36.000 --> 00:55:39.000

We covered what happens to your escrow company refinance because there's funds in there where do those funds go?

00:55:39.000 --> 00:55:48.000

Where happens? If you move out, do you need to change your home equity?

00:55:48.000 --> 00:55:56.000

I'm sorry your homeowner's insurance policy and why we talk about what is the available equity we touch on.

00:55:56.000 --> 00:56:13.000

I cannot give you legal advice, but I can explain the basics of that and if that will be an issue for me, and then I go through the options as I see them, and then, once to identify a specific plan of action, then we sort of dial in those figures, I present that report to their

00:56:13.000 --> 00:56:24.000

divorce team. Whether that's just their attorney or their meteor or their their financial, their certified divorce, financial analyst, who I work with a lot on collaborative divorces.

00:56:24.000 --> 00:56:32.000

And then I sort of I'm in the background as a resource answering questions along the way until we get to that finish line.

00:56:32.000 --> 00:56:39.000

And the way that I explain. As far as you know, one of the questions that I guess a lot is for what do you charge?

00:56:39.000 --> 00:56:57.000

I don't charge for any of this. If there is a mortgage component that makes sense to the clients that really fits within their plan and its benefit, then I would just ask, instead of working with my company or my brokerage, but there's no obligation for them to do that.

00:56:57.000 --> 00:56:58.000

Oh, my goodness!

00:56:58.000 --> 00:57:17.000

As as you know, Lonnie, I've kept my attorney license, and I did it for really to put my clients at is that I am their advocate when it comes to this to this landing planning process that I'm going to put their needs first and I'm

00:57:17.000 --> 00:57:18.000

Yeah.

00:57:18.000 --> 00:57:20.000

not going. I'm never looking to make a profit instead of helping them find a solution.

00:57:20.000 --> 00:57:38.000

And I think they see that once they start talking to me, he bills trust pretty quickly, and I'm happy to be able to do that and to be this neutral convoys through this process, because dealing with the marital home we're dealing with housing of the divorce can be really hard and

00:57:38.000 --> 00:57:39.000

emotional and confusing.

00:57:39.000 --> 00:57:44.000

Oh, definitely it is, it's and just I mean, I.

00:57:44.000 --> 00:58:01.000

If I was a client going, and you know, if I was a client going through a divorce, if I was going to divorce, I would feel so good and so safe to have a resource like you to kind of help me figure out these different financial pieces because it's scary

00:58:01.000 --> 00:58:18.000

and it's something that we as late people and even as divorce attorneys, will don't understand the encoder sees in intracies behind all of this, and, like you said, like a regular why is it that the regular lenders don't know about

00:58:18.000 --> 00:58:22.000

these these different types of considerations? Just because?

00:58:22.000 --> 00:58:26.000

Yeah, it's just just like you being a divorce attorney.

00:58:26.000 --> 00:58:28.000

This is your, this is your focus. This is your specialty.

00:58:28.000 --> 00:58:29.000

This is my lady, and train.

00:58:29.000 --> 00:58:43.000

This is what you try exactly. And this is what I've dedicated my career to, and I am last weekend I was at a family or training, not because I need to be because I wanted to, because I wanted to better my craft and give better service to my clients really understand this process.

00:58:43.000 --> 00:59:06.000

More. I focused on this. I'm a specialist when it comes to divorce mortgage, planning and lending so oh, you won't have really competent, really caring lenders out there who have been doing this for 2030 years for fantastic but they may not know that all

00:59:06.000 --> 00:59:11.000

Yeah.

00:59:11.000 --> 00:59:12.000

Right.

00:59:12.000 --> 00:59:14.000

these little details, or how to look at a divorce degree and know what language needs to be in there, and how the warning will make a difference.

00:59:14.000 --> 00:59:24.000

And this, and they may not have the time that I do to be able to dedicate an average 4 h working with the clients before they actually become a lending client through this process.

00:59:24.000 --> 00:59:26.000

Wow!

00:59:26.000 --> 00:59:28.000

What is significant, and it's pro bono.

00:59:28.000 --> 00:59:51.000

Yeah. Oh, my gosh, well, thank you so much. Mehala, for being on this podcast and just excuse me for just kind of blowing my mind on these blowing my mind on just the nuances and the ink continues and just the displayed knowledge, you need to have

00:59:51.000 --> 01:00:02.000

in terms of divorce, lending and divorce, refinancing, and if people and your company is called truly lending co co.com.

01:00:02.000 --> 01:00:03.000

You, yeah.

01:00:03.000 --> 01:00:04.000

So if you looks wanna go ahead and look her up, go to true lending true.

01:00:04.000 --> 01:00:13.000

T r u E. Lending co.com and go ahead, and you've got to work.

01:00:13.000 --> 01:00:21.000

If you're going through a divorce you're thinking about refinancing you're trying to figure out.

01:00:21.000 --> 01:00:26.000

I you know, do I have? How can I structure my divorce settlement?

01:00:26.000 --> 01:00:42.000

So I can maybe go and buy a property. You've got to go see Miha Ella at Truelending cole.com anything else that I'm you know that I missed, or something that you wanna say in these closing moments?

01:00:42.000 --> 01:00:50.000

I just wanna thank you so much for giving this subject the attention that I feel it deserves.

01:00:50.000 --> 01:01:01.000

For most of us, for most Americans, the biggest asset that we have is our home, and the importance of this planning is, I feel, Uhhuh.

01:01:01.000 --> 01:01:16.000

It's so huge and it makes such an impact for for these clients having a what I call a successful divorce, because it's not just about a piece of paper as I'm sure you know, and you understand, it's about the parenting plan working.

01:01:16.000 --> 01:01:36.000

It's about everything else, the communication, but also each of these individuals walking away and feeling like they are set up for the next chapter in their lives, and if I can help bring this to light to the divorce professionals and to folks out there in general it is my pleasure my privilege thank you

01:01:36.000 --> 01:01:44.000

so much for having me again. Yes, just like you said the company is called lending call, which is true for lending company.

01:01:44.000 --> 01:01:51.000

We're in end months. We can cover all of Washington, California, also Colorado and North Carolina.

01:01:51.000 --> 01:01:55.000

When it comes to any sort of by divorce, lending, planning.

01:01:55.000 --> 01:02:00.000

So please reach out. It's all free. It's all confidential, and we'll love to help out.

01:02:00.000 --> 01:02:16.000

There you go, Washington, California, Colorado, North Carolina, and we'd love to have you come back on the occasional law Podcast, again and share with us your your knowledge and your expertise and divorce lending.

01:02:16.000 --> 01:02:17.000

It'd be my pleasure. Thank you, Lonnie, for doing this and educating the public.

01:02:17.000 --> 01:02:22.000

It's such a great service that you're providing. Thank you.

01:02:22.000 --> 01:02:28.000

Well, thank you so much for just sharing your knowledge and your wisdom in this, in this complicated area.

01:02:28.000 --> 01:02:39.000

But I just love how you explained it, and just you just kind of broke it down, were even I who, I say, you know, I became a lawyer, because I'm not good in math.

01:02:39.000 --> 01:02:41.000

Even I could understand. So thank you so much again and.

01:02:41.000 --> 01:02:45.000

My pleasure. That was really fun.

01:02:45.000 --> 01:02:46.000

Thank you.

01:02:46.000 --> 01:03:03.000

And just thank you all. Alex Tuna, next time for the next episode of Aki on a lot podcast we're in, we talk about anything and everything, vendor sex in the areas of family law, divorce and collaborative divorce, i'm lonnie akiona until

01:03:03.000 --> 01:03:11.000

next time be with us.