REASONS TO FOLLOW INSTRUCTIONS AND START EARLY

True story as told by Mr. Noel Cookman, Loan Officer, Certified Divorce Lending Specialist, Member of the DFW Chapter of the National Association of Divorce Professionals (NADP).

Sandra (not her real name) loses her house because she would not do one simple thing we asked her to do. And, it's sooooo simple and easy.

This is for Friends, Lawyers, Realtors, Interested Persons and Persons of Interest, anyone who is interested in helping friends or family going through a divorce and wondering what to do with the house. Don't hang up. I'm betting you know someone or will know someone who needs your encouragement very soon.

Names are changed to shield from embarrassment, those who didn't do what I told them to do.

The "trick" to what I do in divorce-related mortgages is to fit that divorcing homeowner "in the box." I know how to synchronize the gears of mortgage financing with the gears of divorce settlements. I've spent nearly 25 years perfecting divorce-lending as an art and as a science.

That way, the new loan is not some weird out-of-the-box loan. To most lawyers and borrowers, it looks like magic. To me, it looks normal. When Thomas Edison invented the "light bulb," it looked like magic to a lot of people. To Mr. Edison, it made perfect sense.

Please trust me. I know how to make it work. I've done it for thousands of divorcing folks.

But, here's the deal.

I cannot do that if my potential customers start the application whenever they think it feels right and, I can't work my magic if my customers want to design their own mortgage loan.

This is a dumb mistake that divorcing people make - they want to do it their way; or, worse, they want to do their own loan exactly how their hair-dresser's 3rd cousin's dog-sitter's ex-husband - who "knows" mortgages - tells them it should be done.

That's fine with me. Ask your friend's distant relative to produce the money by the deadline. It's funny how people know all about mortgage loans after a few conversations or even some time spent in the industry. Except, they've never made a loan. When anyone wants to give you advice about mortgage loans, especially in a divorce setting, tell them to

SHOW YOU THE MONEY.

Here's the biggest mistake

most divorcing people make

when it comes to home financing.

And, it's the most common mistake.

THEY DO NOT APPLY EARLY

YUGE MISTAKE. YUGE.

How early should they apply, you ask? How about NOW!

Of course, divorcing homeowners should call me as soon as they find my number, hopefully from you, their lawyer. If a divorcing person finds me on the internet, they should ask their attorney why they didn't connect me with them immediately and start the application immediately. Here's a BIG REASON why.

Sandra's story.

It was August of last year. Sandra called from mediation at the direction of her attorney because I had offered the attorney my "Platinum Level" service - quick response at "WARP speed" - My small team and I went to work immediately and gave the attorney the response she needed. The attorney and her client didn't expect a full, official loan approval on the spot - all they were looking for was an answer to "is this doable?"

Yes, it was. Opposing counsel was satisfied and they began to craft the settlement agreement, although additional mediation was needed to take care of other things.

All the client had to do was follow my instructions.

My first instruction was for Sandra to go online and do the simple loan application. Most folks take this simple step immediately.

But, with Sandra, after 24 hours, no application. As is our custom, we checked in every other day or so, trying to get a response from Sandra. Nothing. Finally, after several days, Sandra said "I'm not ready to start, I need to straighten out a few things."

Failed, right out of the gate and Sandra has handicapped herself, sabotaging a good chance at keeping the house and getting the financing required; and, with Husband relieved of the debt, the buyout would be complete and she could move on with her life with her 3 children.

That was the plan as of August 2024 now it is January 2025 before Sandra responded. By then, she was hot to trot. Both Sandra and the attorney were trying to make sure the financing was good. Sandra finally filled out the application, gave us the extra information we needed and....OOOOOOPS, NO CAN DO. She waited too long to simply fill out the application.

How's that, you ask? Why would she qualify (potentially) in August but not in January, a mere 5 months later? She didn't lose her job. Her income had actually increased slightly. Wasn't the evil lender being too harsh? Was I mistaken to give the attorney a positive thumbs up that the loan was doable? Did I screw up? Am I saying that a loan denial/approval is based on WHEN the loan application was completed?

Here's something that hardly anyone knows and 99% of mortgage loan originators just gloss over this seemingly insignificant lending guideline. First of all, most loan originators think they are divorce-lending experts if they merely know that, in order for child support to count as "qualifying income," the borrower must document receipt of child support payments for 6 months; AND follow instructions; and always read every word of a guideline; AND it must continue for 3 years (as verified by the final decree of divorce, a separation agreement or some other legal agreement).

Here's where 99.999% of everyone falls off the wagon. Everyone supposes that the "continuance" of 3 years must be measured by the date of loan closing or by the date of the beginning of payments, usually the month after final divorce. But that's not what the guidelines say. What do the guidelines state?

First, let’s get back to Sandra...

Her oldest child, for which $600/month in child support will cease upon emancipation, was in the middle of her sophomore year and was already 15 years old. It will be March 2025 at the earliest before the divorce will be final and that's when child support will begin.

Anyone with a calendar, a calculator and a copy of the decree should be able to do the math and figure out that there's no way the support for the oldest child will continue for 3 years. This is why, on the first call, we asked what the ages of the children are, and for 14 year olds, when they will turn 15 and their grade in school?

Do you see where I'm going with this? We are measuring the number of months until emancipation, hoping and praying we have 36, or more, remaining.

Too bad. Now Sandra can only use $1,700/month for qualifying income because, the "step down" amount steps down from $2,300/month to $1,700/month because the oldest child's support will not continue for 3 years.

We can't wind back the clock or calendar. If only...

Hold on. If only what? How could applying early - August 2024 in this case - have changed anything.

Back to what the mortgage guidelines state?

Mortgage guidelines (in all of the major underwriting programs) state that the support must continue for 3 years from "the date of loan application.

This is one of my powerful secrets and how I qualify many more homeowner borrowers coming out of divorce.

If Sandra had let go of her fantasy that she could control mortgage guidelines or even know them all, and if she had listened to my (and her attorney's) instructions, she would have applied for her loan back in August - WHEN I TOLD HER TO DO IT.

I TOLD HER TO DO IT BECAUSE I HAD MULTIPLE REASONS

FOR TELLING HER TO APPLY IMMEDIATELY.

That month would have been the starting point for the 3-year continuance, August 2024.

"But wait a minute," I can hear you say. Emancipation, when tied to high school graduation, happens in May or June, not in August.

Let me show you how my weird, wacky, wonderful mind works. And this is why I say it isn't magic; it's math.

If Sandra had applied in August (payments beginning at that date is another issue that I will address), there would have been only 34 remaining months (assuming the last payment would include support for the oldest child and that would have been May 2027). [August through the following July = 12 months.]

Let's do some math. We need payments to continue for 3 years from date of application. The 3-years' continuance for underwriters in a divorce because they can see - in the decree - exactly how long child or spousal support will continue. So, we just tell the husband that he needs to pay support for two more months - June and July of 2027. That will complete the 36 months' continuance. Don't laugh, I've had motivated fathers who very much needed for their ex-wives to get the house refinanced to relieve them of the debt and pay them their "equity" in the property, so that they could afford to take up with the, you know, the thing. Or whatever. And, they were happy to do it for two extra months.

But, let's say we're working with Mr. McScrooge Pants. He's not paying a penny more than the court orders or what he agreed to pay. Good. He would be paying $600/month difference (between Stage One support and Stage Two support) for the first 34 months. That's 34 X $600 or $20,400.

Now watch this amazing math - hang in there, this is very complicated. Divide $20,400 by 36 months and you get $566.67.

So, instead of paying $2,300/month ($1,700 + $600), he could pay $1,700 + $566.67 or $2,266.67/month until July 2027. Sandra now qualifies with $2,266.67/month instead of $1,700/month and ex-hubby pays not a dime more.

This is what I do. I

• EXPLOIT and

• MANEUVER and

• MANIPULATE and

• UTILIZE EVERY PLOY and

• "PUSH EVERY ENVELOPE" and

• USE EVERY MORTGAGE GUIDELINE, and then I

• synchronize those with legal, mortgage regulations and the contemplated divorce settlement and to get divorcing moms and dads what they need to get and keep a home for their family.

I didn't write the rules, I just use them to your advantage.

Heck Fire! I've been doing this so long I'm just going to say it

I FIX UP WHAT PEOPLE SCREW UP.

There's a more Texas way of saying that.

But I need to leave a little to your imagination.

To be fair to people like Sandra and attorneys and realtors and even mortgage loan officers who still don't understand, it is the banks and mortgage lenders who told divorcing folks for years. "Get your divorce final, bring us the decree and let's see what we can do."

Next bombshell secret for getting divorcing folks qualified for their next mortgage loan.

One more thing about Sandra. How are we going to get hubby to start paying child support when the divorce is not final, there is no legal order to require it, there is no compelling reason for the court to order it and he doesn't have the income to add $2,300/month to his expenses? Like so many cases, unless someone introduces a literal NO-COST way to work that magic,

It's easier than you think. It's so easy, I have about a 95% success rate of making it happen.

I'll cover that in the next episode of "Fixing Stuff With America's Premier Divorce-Lending Authority."