"Get it over with!"

Beginning in January, 2009 and continuing until the marital house is sold, spouse #1 will recieve $1000 per month from spouse #2 who also pays housing costs (PITI plus utilities) of $4000 directly to mortgage servicer and utility companies.  After sale of marital house, spouse #1 will receive $5000/month for more than three years.  Sale of the marital home is taking place in September, 2009.  Spouse #1 has no other income except as a result of the divorce and would like to move to a smaller home with the children.

Under this situation, the earliest spouse #1 could use $5000 in income to close on on new purchase would be                                                            January 2010. 

Mortgage guidelines require evidence of the receipt of income for at least three months prior to closing and evidence that it will continue for at least three years after closing.

NOTICE DIVORCE ATTORNEYs

Even though it looks like a DUCK, mortgage underwriters can not use the "direct payment for the benefit of the spouse" as income to meet this guideline. 

With a minor wording change, Spouse #1 could have closed       September 2009.

To eliminate the lag in closing, the divorce decree wording only needs to be changed to state that Spouse #2 was responsible for housing payments (PITI + utilities) until the house was sold and she would receive $5000 per month until that time and thereafter for more than three years.  While there is some risk to Spouse #2 that Spouse will choose not to pay the mortgage payment, Spouse #2 can check on-line to make sure that timely payment is made and make the payment and readjust the method of paying Spouse #1 in future months.  I'm sure the attorneys can eliminate this risk. 

Same message, same cash flows but the underwriter is protected - isn't that what it is all about????

Have a great day!