Kelly Lise's Blog

Divorce This House Featured in Blog by Maryland Divorce Legal Crier

Kelly Lise Murray (DivorceThisHouse.com) — Tue, 27 Jan 2009 20:29:11 -0600

Divorce the House Then the Spouse

http://tinyurl.com/c4habe Maryland Divorce Legal Crier posted January 27, 2009

A big mistake that a lot of people make in divorce is trying to keep the house according to an article by Lew Sichelman in the Chicago Tribune. http://tinyurl.com/957htd

Indeed in Maryland the court can grant use and possession of the family residence for up to three years from the date of divorce to the parent who gets custody of the minor children. In other words, keep the kids, keep the house.

But Kelly Lise Murray, lawyer and real estate agent in Nashville, says if you must keep the house, you should obtain an appraisal, a third-party inspection, a termite inspection, and a title search for hidden liens. Murray also says you should consider the true cost of home ownership, which may include things like lawn care, homeowner's association fees, replacement of appliances, maintenance and upkeep.

Murray says people tend to underestimate the "ghosts" that go along with keeping the house. The place is often so filled with memories, both good and bad, she says, that "it's not the family home anymore. It's a huge lodestone. If you're still linked through the house, then you're not really divorced."

Real Estate Success Inspired by "Recession Lessons" from www.SundayCosmetics.com

Kelly Lise Murray (DivorceThisHouse.com) — Mon, 19 Jan 2009 07:48:47 -0600

Bev Davis - www.SundayCosmetics.com - has an excellent series on www.Twitter.com/sundaycosmetics re: "Recession Lessons."

A recurring theme from Ms. Davis' entrepreneurial teachings: "multiple streams of income."

REALTORS should follow Ms. Davis' lead - not having all real estate efforts or "eggs" in one fragile, recession-risk basket.

Real estate is recession-proof, if you know where to look. And a lucrative place to start - life changes.

More positive life changes (job transfer, new baby, relocation-closer to family) and more challenging life changes (loss of job, serious illness/disability/injury, divorce, death) often change real estate needs.

To jump start your real estate year, be of service to others re: life changes.

So instead of making 50 cold calls per day, target your time and effort. Who finds out first about life changes? Hair dressers, chiropractors...bar tenders.

Seriously, once you start strategizing your service-oriented market research, you will find more opportunities to be of service selling real estate. Making those life changes more positive for all!

That is the essence of "Social Capitalism" - helping others in need and being compensated for your professional efforts.

For more information, go to www.DivorceThisHouse.com

Jan 13 Georgia Family Law Blog Featured Divorce This House!

Kelly Lise Murray (DivorceThisHouse.com) — Sat, 17 Jan 2009 15:49:32 -0600

The January 13, 2009 Georgia Family Law Blog by Stephen M. Worrall featured Divorce this House

http://tinyurl.com/a2ldtt

Kelly Lise Murray, Co-Founder & President of DivorceThisHouse.com warns against a hidden danger of divorce real estate -post-divorce mortgages.

Not all forms of alimony and child support count as YOUR income for mortgage purposes. In an article posted on ActiveRain.com, she cautions child support recipients that accepting your support by direct deposit is a huge mistake. She says the same is true about cash. The reason: Banks require proof of income. When you receive support by direct deposit or in cash, there is no paper trail or proof of income.

These are the things you need:

1. A Paper Trail - A Track Record of On-time Payment in Full:

Without a paper trail creating a track record on on-time payments by the obligor, the mortgage lender cannot count your support as income. And you may not qualify for a mortgage without it.

For the best paper trail, she suggests you have your support payments sent directly to state. The slight time delay (from spouse to state to you) is more than made up for by the benefits of state-tracking and collection assistance for support arrears. Plus, state-tracked child support arrears can become liens on your spouse's post-divorce property; as a result, your spouse cannot refinance or sell that property without paying you!

Otherwise, only accept support by check and make sure you photocopy and keep a record of each support check you receive.

2. A Court Order Requiring Support for at Least 3 Years from the Date Your Mortgage Closes:

Lenders require a court order continuing child support for 3 years before it counts as income. The same is true for alimony/spousal support.

You must actually receive support payments ontime, in full for 3 to 12 months before lenders will approve a mortgage, depending on the loan program.

The bottom line: A mortgage professional can help you determine your best options now for a stronger financial future! And sooner is always better in divorce real estate.

SOURCE: ActiveRain.com

Jan 17 Property Lines Blog features Divorce This House

Kelly Lise Murray (DivorceThisHouse.com) — Sat, 17 Jan 2009 15:19:34 -0600

The January 4, 2009 Los Angeles Times article featuring Divorce This House was re-blogged (positively)! in Property Lines by Barbara E. Hernandez http://tinyurl.com/8vbrl6

Keeping the House Makes for a Messy Divorce

Splitting up after years of marriage? Divorce your house, then your spouse.

That bit of advice goes against the almost universal desire to hang on to the family home, especially by the spouse who ends up with custody of the children.

"If you're still linked through the house, then you're not really divorced," says Kelly Lise Murray, a Harvard-trained lawyer and Nashville real estate agent.

People tend to underestimate the true cost of homeownership, drastically overstating the remaining spouse's ability to afford the place, Murray says.

Even in a friendly divorce, certain key expenses are overlooked. Lawn care, homeowners association fees, even the basic costs of maintenance are among the costs that are rarely considered, either by the courts or the splitting spouses

Home Buyers Beware - Get a CLUE (Report) Before. Or Else You Could Lose Your Home Insurance, Your Home Equity and Even Your Mortgage!

Kelly Lise Murray (DivorceThisHouse.com) — Sat, 17 Jan 2009 08:46:44 -0600

We received a detailed and extremely helpful comment to our January 16 Blog about C.L.U.E. reports - Comprehensive Loss Underwriting Exchange.

Sidebar: Through C.L.U.E. reports, subscribing insurers (including the big 5) exchange claim history and loss information about your house, your car and you. They use this information for underwriting purposes to determine whether to issue you an insurance policy and if so, at what rate. Higher risk = higher rate.

Back to the January 16 blog comment. This home buyer bought a house and within 30 days was informed by a big insurer they were dropping his home insurance coverage. Not because of his income or his credit score. They dropped him because of his house.

His new house? The house he just bought?

Here's an excerpt (emphasis added):

When I bought my present home, all seemed to be fine, mortgage went through, homeowners paid one year in advance. 30 days after moving into the home, I received a letter from my major brand name insurer that my homeowners insurance had been canceled. Included was a check for remaining 11 months coverage due to cancellation. Reasons cited w[ere] the house needed a new roof and front steps needed put back into proper place...

Once dropped by that major insurer, it was impossible to find coverage with a different major insurer. I finally did get insurance from a smaller company and have been with them ever since. My new agent told me the reason I had trouble getting insurance was that there were several insurance claims against the property I had purchased. A CLUE report would have shown that, but I knew nothing about that.

As confirmed by the home buyer, a CLUE report would have shown that the house needed a new roof. Depending on the size of the house, roof replacement can cost $8,000-$12,000. A critical and expensive fix.

Wouldn't you want to know that the house you are considering buying needs a new roof... before you agree on a price to buy the house? [YES!!!]

What about prior insurance claims on the house you may buy? What if there had been a fire, or a flood? The insurance claim history may reveal this important information (for up to 7 years prior)... at no cost to you or the seller! [YES!!!]

Bottom line: thinking about buying a house? GET A C.L.U.E. (Report) first - for FREE!

The seller is entitled to one free C.L.U.E. Report each year. From either Choice Point/Choice Trust (the company who maintains this data) or from the owner's home insurance agent.

Protect yourself. Ask your REALTOR about requesting as part of your written purchase offer.

To check home insurance "health," the owner may ask her insurance agent for a copy of the C.L.U.E. report for the house. www.choicetrust.com or http://tinyurl.com/dm67d

And as a home buyer, a licensed insurance professional can help you determine your best options now for a stronger financial future - before you buy your dream house!

www.DivorceThisHouse.com

For more information about how home insurance can cancel your mortgage, see our January 16, 2009 blog - Hidden Divorce Mortgage Mistake - Home Insurance http://tinyurl.com/788nqx

Hidden Divorce Mortgage Mistake - Home Insurance?

Kelly Lise Murray (DivorceThisHouse.com) — Fri, 16 Jan 2009 05:29:56 -0600

Another hidden danger of divorce mortgages - home insurance

Did you know home insurance is required to close or keep a mortgage? If the house you buy (or keep per divorce) is later found to be uninsurable, the lender (based on contract language in the loan documents) can call the loan - essentially canceling your mortgage before it's barely begun.

Did you know pending insurance claims on a house will likely prevent a mortgage from closing?

Another casualty - your credit score: In divorce, if you cannot individually qualify for home insurance on the family house you own with your EX, you cannot individually refinance the mortgage.

Many of the dangers from owning a house without home insurance are obvious. But if the marital joint mortgage is not individually refinanced, you and your EX are still linked through a major debt - the mortgage. One late mortgage payment drops both of your credit scores (20-100 points); foreclosure is reported on both spouses' credit reports. As a result, you're not really divorced - financially speaking.

Solution - more information: To check your home insurance "health," ask your insurance agent for a copy of the C.L.U.E. report for your house. C.L.U.E. stands for Comprehensive Loss Underwriting Exchange. Under federal fair credit laws, home owners are entitled to one free C.L.U.E. report per year. www.choicetrust.com or http://tinyurl.com/dm67d

As always, a licensed insurance professional can help you determine your best options now for a stronger financial future.

www.DivorceThisHouse.com

Bankruptcy Busts Divorce Home Equity Buy Out under Chapter 13 - Personal Reorganization

Kelly Lise Murray (DivorceThisHouse.com) — Thu, 15 Jan 2009 07:27:02 -0600

Bankruptcy after divorce can undo a lot of what your divorce did, especially regarding who pays what (that is, the allocation of debt).

Under the 2005 amendments to the federal bankruptcy code (Bankruptcy Abuse Prevention and Consumer Protection Act or "BAPCPA"), if your spouse kept the house and is paying you for your share of the house equity over time... you are at risk.

That is because under Chapter 13 reorganization (the easier form of personal bankruptcy to qualify for), home equity debts - technically non-support domestic obligations - ARE dischargeable.

Discharge in bankruptcy "wipes the slate clean," meaning the debtor (e.g. your EX) is no longer required to pay the discharged debt. Danger: the bankruptcy judge could wipe out your equity if your EX files for personal bankruptcy under Chapter 13!

To make matters... more confusing, the same house equity debt is NOT dischargeable under Chapter 7 liquidation (the more difficult form of personal bankruptcy to qualify for).

For more details on the intersection of bankruptcy and divorce, check out Cynthia M. Fox's blog, "The Fox Family Files." http://tinyurl.com/9gwrqq

As always, a family lawyer licensed in your jurisdiction can advise you on your best options during the divorce process for a stronger financial future after your divorce.

After Divorce Mortgage Option for Stay At Home Parent - Kiddie Condo Loan Program

Kelly Lise Murray (DivorceThisHouse.com) — Wed, 14 Jan 2009 08:17:20 -0600

Sound familiar: "I have to keep the house - because I can't qualify for a mortgage on another property."

This is especially true for stay at home parents whose positive economic contribution to the family - although recognized by the family court - is invisible on their current credit report. Low credit or no credit is not helpful for mortgage underwriting purposes.

One post-divorce mortgage option for some stay at home parents - the Kiddie Condo Loan Program.

It was originally developed by the FHA for undergrad/grad students and their parents who, rather than rent for 4-5 years, chose to buy a house and rent out rooms to other students to help cover the mortgage.

Great news - this program is NOT limited to students or condos:

It's open to any direct blood relative, such as a parent helping an adult child, a sibling helping a sibling, or an adult child helping her parent.
The co-borrower need not be a blood relative (so long as the relationship with the resident borrower can be established as relative-like and long-term outside of mortgage purposes).

The down payment is lower when co-borrowing with a direct blood relative. Both borrowers take title to the property and are each individually liable for the loan, but the resident borrower or the co-borrower can claim the property as her homestead, lowering taxes and insurance costs.

There are loan limits and residential size restrictions. No McMansion with a jumbo loan ($417,000+).

The program guidelines are somewhat stricter in the current mortgage/economic climate, but the opportunity remains, especially if you have a blood relative willing and financially able to help.

For the latest information, rules, and requirements on this and other loan programs, contact a mortgage professional.

How Support via Direct Deposit Damages Your Mortgage Application After Divorce

Kelly Lise Murray (DivorceThisHouse.com) — Tue, 13 Jan 2009 07:08:16 -0600

Not all forms of alimony and child support count as YOUR income for mortgage purposes

Accepting your support by direct deposit is a huge mistake. Same thing with cash. Banks require proof of income. When you receive support by direct deposit or in cash, there is no paper trail or proof of income.

You Need a Paper Trail - Track Record of On-time Payment in Full:

Without a paper trail, the mortgage lender cannot count your support as income. And you may not qualify for a mortgage without it.

For the best paper trail, have your support payments sent directly to state. The slight time delay (from spouse to state to you) is more than made up for by the benefits of state-tracking and collection assistance for support arrears. Plus, state-tracked child support arrears can become liens on your spouse's post-divorce property; as a result, your spouse cannot refinance or sell that property without paying you!

Otherwise, only accept support by check and make sure you photocopy and keep a record of each support check you receive.

You Also Need a Court Order Requiring Support for at Least 3 Years from the Date Your Mortgage Closes:

Lenders require a court order continuing child support for 3 years before it counts as income. The same is true for alimony/spousal support.

You must actually receive support payments ontime, in full for 3 to 12 months before lenders will approve a mortgage, depending on the loan program.

Bottom Line: A mortgage professional can help you determine your best options now for a stronger financial future! And sooner is always better in divorce real estate.

Another hidden danger of divorce real estate -post-divorce mortgages.

Only Two Ways Off of a Joint Mortgage Per Divorce - Do You Owe (on) a House You Don't Own?

Kelly Lise Murray (DivorceThisHouse.com) — Mon, 12 Jan 2009 09:19:28 -0600

Another hidden danger of divorce real estate - joint mortgage after your divorce.

Sound familiar: "I signed the papers. Why is my name still on the mortgage?"

There are only two ways off of a joint mortgage:

Individually refinance the joint mortgage in the name of one spouse only OR
Sell the house

That's it. Simply signing papers likely means you gave up OWNERSHIP without giving up DEBT. It means you owe on a house you no longer own.

This is a HUGE mistake.

By signing a quitclaim deed, you transfer your ownership interest (whatever interest you currently have) in the former family home to your EX. Quitclaim deeds are very common in divorce in most states.

After transferring title (deeding ownership to your EX), you cannot force the sale of the house - since you are no longer an owner. But the lender can come after you for full repayment of the entire mortgage.

Because the lender still has two co-borrowers - you and your EX. Your divorce decree has no effect on your lender or other third party creditors (such as credit card companies). Even if you have a hold harmless provision in your settlement or divorce decree/final judgment ending your marriage.

But wait, it gets worse. One late payment on the joint mortgage after divorce drops your credit score (20-100 points). Foreclosure on the joint mortgage is also your foreclosure - a strong negative on your FICO score for up to 7 years. Foreclosure can drop a high credit score up to 200 points, requiring years to get back to where you were.

Bottom line: you're not really divorced if you're still linked through a joint mortgage.

To avoid this and other major real estate mistakes, the best time to protect your financial future is BEFORE your divorce is final.

Divorce Derails House from Handshake Inheritance

Kelly Lise Murray (DivorceThisHouse.com) — Sun, 11 Jan 2009 10:44:00 -0600

My first LIVE caller during a Colorado radio interview highlighted another hidden danger from divorce real estate:

To help their adult son get back on his feet financially, the parents gifted an "early inheritance" to buy a fixer-upper. But with the son's credit issues, only the parents were named on the house title and mortgage.

Fast forward a few years and two new developments:

happily the fixer-upper is fixed (by the son) and the house has appreciated in value
sadly the parents are now divorcing

The divorce rub: one parent confirms the son's house is an inheritance but the other wants the "son's" house included as a marital asset.

With no paper trail confirming the inheritance, the parents are both SPENDING marital assets to litigate whether they gifted the funds needed to purchase the son's house.

Bottom line: no one is winning financially or emotionally in this battle.

Lesson learned: Get it in writing. This problem could easily have been prevented with professional help regarding the "gift" or early inheritance at the time the house was purchased. Now per divorce, after significant costs and legal fees, it will be resolved by the judge - with no one the true winner, no matter how it turns out.

Chicago Tribune featured Divorce This House on Friday, January 9, 2009!

Kelly Lise Murray (DivorceThisHouse.com) — Sat, 10 Jan 2009 10:15:04 -0600

As a former Chicago litigator, I am thrilled that the Chicago Tribune featured Divorce This House on Friday, January 9, 2009 http://tinyurl.com/957htd.

Divorce the house before the spouse

January 9, 2009

By Lew Sichelman

Splitting up after years of marriage? Divorce your house, then your spouse.

"If you're still linked through the house, then you're not really divorced," says Kelly Lise Murray, a Harvard-trained lawyer and Nashville real estate agent.

That bit of advice goes against the almost universal desire to hang on to the family home, especially by the spouse who ends up with custody of the children. Indeed, the courts almost always give special consideration to the parent who gets the kids: Keep the kids, keep the house.

But Murray, who describes herself as a "divorce real estate advocate," says people tend to underestimate the "ghosts" that go along with keeping the house. The place is often so filled with memories, both good and bad, she says, that "it's not the family home anymore. It's a huge lodestone."

People also tend to underestimate the true cost of homeownership, so much so, according to Murray, that the remaining spouse's ability to afford the place is often drastically overstated.

Even in a friendly divorce, if there really is such a thing, certain key expenses are either forgotten or overlooked. Lawn care, homeowners' association fees, even the basic costs of maintenance and upkeep are among the costs that are rarely considered, either by the courts or the spouses.

Then there's the even bigger issue of hidden debt. Ideally there will have been no secrets between the husband and wife. But money is a major cause of divorce, and in many cases, one spouse has no clue that the other one has rung up big bills that have become undisclosed liens against the property.

"I see it a lot," says Murray, whose goal is to reform divorce law as it pertains to real estate, one state at a time. "It's frequent. And what you don't know during your divorce can hurt you long after the marriage is over."

Fortunately, a major mistake is preventable-but only during your divorce, not afterwards. So Murray's mantra is "more earlier," as in more due diligence and more information from more financial and real estate experts, all much earlier in the divorce process.

In most divorces, the spouses determine what the house is worth, and the one who gives up the place is usually given a credit of some sort for his or her half of the equity the couple has in the place. Typically, the parties split the difference based on an appraisal. So if an appraiser says the house is worth, say, $300,000 and they owe $200,000, the "out spouse"-usually the man-gives up his claim to his $50,000 equity stake for, perhaps, $50,000 in stocks and bonds.

But along with that appraisal, Murray says the "house spouse" should obtain an independent, third-party inspection of the property to determine whether there are any latent defects that could impact its value.

"You wouldn't buy a house without an inspection, so why would you accept one in a divorce without an inspection?" Murray asks. "What if something's wrong or about to go wrong? You can use the inspector's report as a punch list, and either use the marital assets to make the necessary repairs or reduce the value of the property accordingly."

Make sure to ask your inspector to estimate the remaining life of the property's major appliances and systems. If something is on its last legs, you'll want to know in advance so you can adjust for that as well. And while you're at it, order a termite inspection-the damage those little buggers cause is often significant.

The real estate divorce specialist, whose book, "Divorce This House: When Keeping Your House Equals Losing Your Divorce" ($19.95, divorceyourhousetoo.com) was released in December, also wants the spouses to have two title searches, one soon after the divorce process begins and the other shortly before it's finalized.

The first will uncover any unknown liens, encumbrances or clouds on the title that may have been placed by one spouse without the other's knowledge. Often, there is-a second mortgage, perhaps, or maybe a gambling debt that has become a lien on the property. The second will uncover anything placed on the title during the proceedings, such as a lien filed by the out spouse's attorney to cover his fees.

Speaking of one spouse not being totally honest and aboveboard with the other, it might not hurt, either, to request a CLUE report from the company that insures your home or directly from ChoiceTrust.com.

CLUE (comprehensive loss underwriting exchange) provides a seven-year history of losses associated with an individual and his or her personal property. If you didn't normally handle the household finances, the report could alert you to the fact that your mate pocketed the insurance money instead of paying to repair the roof that was damaged a few years ago.

The more people follow these guidelines, Murray believes, the more they will end up selling the once-family home and moving on.

United Feature Syndicate

Divorce Dish (es) about Divorce This House (tm)

Kelly Lise Murray (DivorceThisHouse.com) — Fri, 09 Jan 2009 06:35:54 -0600

From the Divorce Dish Blog by Lisa Decker, www.DivorceMoneyMatters.com

Kelly Lise Murray, a Harvard-trained lawyer and Nashville real estate agent has some interesting ideas and insight when it comes to divorce and the family home. www.DivorceThisHouse.com We spoke recently and look forward to do some complimentary work to help clients, and their attorneys, understand all why the family home can continue to be a money pit even after the divorce is over. Another reason to make sure you understand all the issues regarding the financial aspects of your divorce! http://tinyurl.com/5hyx8k

Divorce this House - Important Training for Real Estate Professionals

Kelly Lise Murray (DivorceThisHouse.com) — Thu, 08 Jan 2009 13:08:09 -0600

Via Jenifer Ishee Shorrosh (Jenifer Laurie):

Divorce this House was created by Kelly Lise Murray, a Harvard Law School graduate and Wendy Wasalle, a successful home stager to actually change legislation to include Realtors and appraisers early on in the divorce process before mistakes can be made than cannot be undone. They currently train real estate professionals and attorneys to assist divorcing homeowners in calculating the true value of their home. The period during a divorce is such an emotional and stressful time. That is why it is so important to have trained professionals advising and assisting homeowners. Cooler heads do prevail when they have been trained specifically to deal with these issues. I encourage you to find out more information at www.divorcethishouse.com, and consider obtaining training in this area. I have met these ladies, and they are great people, who care passionately about this subject and genuinely want to help prevent homeowners from making huge mistakes with their greatest asset.

You're not really divorced if you're still linked through your house

Kelly Lise Murray (DivorceThisHouse.com) — Thu, 08 Jan 2009 13:05:23 -0600

Divorce This House was featured in the Los Angeles Times on Sunday, January 4, 2009 - wow!

http://www.latimes.com/business/la-fi-lew4-2009jan04,0,5952121.story

HOUSING SCENE

Keeping the house makes for a messy divorce

It's not just a matter of who keeps the home. Loans, liens and other financial issues can preclude a clean split.

By Lew Sichelman
January 4, 2009

Reporting from Washington -- Splitting up after years of marriage? Divorce your house, then your spouse.

That bit of advice goes against the almost universal desire to hang on to the family home, especially by the spouse who ends up with custody of the children.

http://www.latimes.com/wireless/avantgo/la-fi-lew4-2009jan04,0,4316209.story

Hidden Time Bomb in Suggested Solution for Divorce Real Estate

Kelly Lise Murray (DivorceThisHouse.com) — Wed, 07 Jan 2009 06:49:39 -0600

Regarding divorce real estate, I received this morning the following message via Active Rain:

best solution to date is utah, wife files, husband keeps home, kids, wfe takes apt., two jobs, pays support, has visitation, youngest child turns of age, house divided at that time.

The hidden dangers of delayed sale/joint home ownership AFTER divorce essentially create a time bomb for either or both spouses. One specific danger (among many) - post divorce liens.

Utah is an equitable distribution state, and debts of either spouse after divorce can be recorded as liens against the title to the former family house.

Because liens follow the land, after divorce the former family house cannot be sold, and the mortgage cannot be refinanced, unless the liens are released - often requiring payment in full.

So long as the EX Husband and EX Wife co-own this house, they may be divorced but they didn't divorce the house!