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Written by
Noel Cookman

Q&A #2C: Who Determines an Ex-Spouse's Portion of "Available Equity?"

Published On 
November 5, 2020

Here is the last part of this second question in my series. Just go back to the most recent posts to get the flow of thought.

I pick up with the exchange between RB and me.

Question (from RB)

Thank you so much for sharing your expert knowledge!

I've already taken over ownership, I've refinanced, and we've already had the disbursement of the 80%, which has been split half to me and half to him.

My question really revolves around what is standard practice regarding that other 20% that you stated was "off limits" -- especially as it relates to divorce decree language that states we are to split the "available equity". To me that meant what was given and nothing more.

He's seeing $$ in what is still left in the house and I'm trying to figure out if this is even reasonable.

Thank you.  RB


Answer (from Noel)

Pre-script: So, why did I not just give you all the facts at the beginning…you know, like a good lawyer would have done? Because I want you to see how the typical home owner thinks and what struggles a divorced client experiences when their home financing is not properly addressed in a divorce settlement.

Now, on with my answer…

So, if the divorce is final, sounds like he’s trying to re-negotiate the terms. If it’s not, then you have a situation whereby the other side is trying to change the terms mid-stream???

Noel Cookman


Follow up question from RB


Hi Noel,

It is final!  I believe the issue is in the appropriate definition of "available equity" that appears in the decree. No one seems to be able to define it clearly!

So now I am stuck trying to figure out if I have properly fulfilled the terms in the agreement or not. Hmmph.

If you have any cases you know where a precedent has been set in a case like this, I'd like to hear about it.

Also, as an expert, what do you honestly think about the division as it has already occurred?

Thanks again.



Answer from Noel

My professional opinion is that you have fulfilled your part of the decree/settlement.

Here’s why:

It was your husband’s choice to obtain equity financing on the property. Therefore, it was his decision to limit his access to the home’s value.

It’s settled. It’s in the decree. And, some lender agreed that you were fulfilling the requirements of the decree. More importantly, the title company (which policies are underwritten by attorneys) believed that your payment fulfilled the requirements of the divorce settlement. [In the absence of a dollar amount, someone had to determine what the “available equity” was.]

I think you could still tell him to buy the property from you and PAY YOU that extra amount. ?


It’s always difficult – impossible really – to advise clients on what another lender might do. For me, it’s simple – I can tell you and the client exactly what I (my mortgage bank) will do and precisely how to structure the settlement so as to accommodate it.

This case illustrates how important it is to prescribe exactitude in settlements pertaining to the buyout. In this case, no amount was specified. It was just “half the equity.” If two rational angels are divorcing, that can work because, post divorce, they can create the exact buyout amount. Please refer your rational angels to me…as a pair. I will gladly work with them to obtain financing.

I know much less about the law than do you…even less about Indiana law. But, with a settlement that says “half the equity,” even after the financing and depending on what documents (like specific agreements that attest that “half the equity” was indeed paid in full with no recourse to some later portion of the equity) it sounds like the husband may have cause (read “able to retain a lawyer to represent him”) to sue for more cash. Personally, I would love to testify at such a hearing or trial. But, why even go there when it’s entirely unnecessary IN A DIVORCE SETTLEMENT THAT IS UNDERWRITTEN PROPERLY AND FINANCED WITH CLEAR FINALITY OF TERMS. That is, when a dollar amount of buyout is agreed – AND PAID – there is hardly any chance that the grantor of his/her interest in the property can come back later to claim additional interest in the property. At least, no non-mob financing is available for such “interest.”


You can always email me your questions, [email protected]

Thanks for reading,

Noel Cookman


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