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

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

I will deal more with income in the 2 nd 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.

PLEASE DO NOT FINALIZE YOUR DIVORCE UNTIL I HAVE PREVIEWED THE DECREE

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:

Take an application from the client – sooner than later

Calculate actual debt and actual income to determine a ratio

“Read” the settlement in advance (includes PRE-Underwriting the decree).

In the 3 rd 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 972-724-2881 Noel@TheMortgageInstitute.com