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Written by
Noel Cookman

4 Make or Break Factors in a Divorce Settlement: #1 – Debt/Income Ratios

Published On 
May 19, 2020

I will deal more with Debt more in the 3rd Quadrant (Buyouts)

I will deal more with income in the 2nd Quadrant (Support)

But, this is YUGE. It’s actually a matter of federal law with a few “safe harbor” exceptions.

If you don’t get this right – even by accident – there is no forgiveness, your client doesn’t get the mortgage loan.

It’s not just income and it’s not just debt – it’s the ratio.

Debt/Income RATIO.

So, just having a handle on debt assignment is only half the equation. If you don’t know the income, you’re lost.

And, when it comes to mortgages,

it’s not just income – it’s QUALIFYING income

I can give you some tips but the only way to make sure you don’t BREAK the deal is to have a Divorce Lending Specialist look at it and give you a professional evaluation. [Bad news: there are hardly any true Divorce-Lending Specialists out there; Good news: I know a guy.]

The only way they can give you a real, usable evaluation is to take an application.

The only way they can make sense of the application is to calculate the new DEBT/INCOME ratios;

The only way they can do that is if they know how to READ and PREDICT the settlement. That’s part of the magic. That’s part of the secret sauce.

They have to know how to PRE-UNDERWRITE the divorce decree. This is why we publish the following notice in our Assessments and our email signatures.


You should know that we are not performing a legal review of a decree. I’m not a lawyer and even if I were, I would not be inserting my legal opinion in another’s case. I am a mortgage person and I have to keep my promise to you and your client:

I will turn white paper (divorce decrees)into

Green Money (funded loans, buyouts, legal fees paid, etc.)

To summarize, the Divorce-Lending Specialist (The Mortgage Institute) must do 3 things to assure that this Make-or-Break Factor – Debt/Income Ratio – does not exceed the maximum allowable:

  1. Take an application from the client – sooner than later
  2. Calculate actual debt and actual income to determine a ratio
  3. “Read” the settlement in advance (includes PRE-Underwriting the decree).

In the 3rd Factor video, I’ll show you that we can manipulate the Debt/Income ratios in order to qualify borrowers who would not otherwise qualify. If you’ve been communicating with me (phone or email – and you know I’m the easiest guy on the internet to contact), you know part of my secret sauce – how I manipulate ratios to make deals work. I can tell you in our personal communication but I am not apt to reveal it on the internet.

But, first things first. Call me now. I’ll figure it out.

Noel Cookman
[email protected]

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