Whether you are a Real Estate Agent or a Mortgage Lender…WE ARE REAL ESTATE PROFESSIONALS, and it is our underlying duty to help our clients manage through transitions in their lives.
We help people manage their way through life transitions
There are 2 types of transitions our Clients experience throughout life…positive (happy) transitions, and negative (not-so-happy) transitions. Examples of positive (happy) transitions are when we help our clients buy their first home, also when we help them upgrade to a larger home…especially if that upgrade is in connection with a job promotion and/or increase in family size. Or maybe when we help one of our clients buy a rental property and take a pivotal step towards securing their financial future.
Yet there are also negative (not-so-happy) transitions. Most notably, death, divorce, and financial hardships. In this article, I am going to discuss divorce. I apologize in advance if the topic of divorce makes any of you feel uncomfortable…that is certainly not the intent. The fact of the matter is that divorce is real…divorce happens…divorce is interwoven into the fabric of our society.
Certified Divorce Lending Professionals (CDLP's)
are all about Ethical Consumer Protection
I think it is an appropriate time to acknowledge the elephant in the room. We live in a time where any ambiguity can and will be used against us in the court of public opinion. That said, please allow me to alleviate any ambiguity by clarifying the fact that everything in this article is (and our actions in the field as CDLP's are) centered around ETHICAL CONSUMER PROTECTION. Therefore, nothing about this article is (nor are our actions in the field are as CDLP's) meant on any level to 1) disrespect the sanctity of marriage, 2) nor is it meant to celebrate the fact that so many marriages end in divorce. 3) and if there is one thing you hear today, please hear this…we are not encouraging any of you to intentionally “break up any marriages” in order to earn a commission!
Notable Numbers & Trends
First I’d like to give you a few statistics. As we know, specific statistical numbers vary depending on the time frame studied, so I will estimate a few key numbers for you:
- If you took the number of total divorces in a calendar year…not filings, but actual “completed divorces” in a calendar year, and divided that number by the amount of days in the year, hours in a day, minutes in an hour, and seconds in a minute…each of us could hold our breaths long enough to see 2-3 marriages end in divorce.
- Approximately 50% of all 1st marriages end in divorce. As far as 2nd marriages, well that number increases closer to 2/3 ending in divorce. When we look at 3rd+ marriages, we are closer to ¾ of them ending in divorce. Again, we are not celebrating the fact that so many marriages end in divorce…but these numbers are noteworthy.
- Divorces for people ages 50-64 have roughly doubled according to a recent study…yet that’s not the worse. Ages 65+ have roughly tripled during that time frame! In fact there are a few terms for this population nowadays. Both of these terms relate to the hair color of this demographic. We have “Grey Divorce”…and the other are called “Silver Splitters”. These are not my terms…and you are welcome to Google them. On a side note, do you think this demographic owns real estate?
- It is estimated that nearly 70% of all divorces involve Real Estate. When Real Estate is involved, there are typically 3 choices the divorcing couple has with this property:
- Sell the property and split the profits
- One keeps the property and buys out the other
- Both keep the property and continue to own it as business partners after they are divorced (which is rare, for obvious reasons)
The Puzzle Pieces of Divorce
Below is a simple, yet powerful image (created/provided by the Divorce Lending Association). Analyzing this image will help you better understand the role of a CDLP in the process.
In the most simple of terms, all Divorcing Homeowners have…at minimum, these 4 puzzle pieces to navigate through amidst their divorce.
- First is the legal side of the process. Regardless of whether either/both of the Divorcing Homeowners hire an Attorney, there are still legal protocols & laws, and of course, a Judge who ultimately makes the divorce official.
- There is always a high potential of tax implications to consider, such as capital gains, mortgage interest deductions, and/or the liquidation of retirement accounts prior to reaching the age of retirement.
- As indicated by the term “Divorcing Homeowners” we of course have real estate involved
- And where there is real estate, there is often a mortgage
If you look closely at the image, these puzzle pieces are meant to connect with each other, but they are currently not connected. The symbolism behind the lack of connectivity is due to the fact that each of the 4 professionals involved typically “work on their own puzzle piece” but “fail to collaborate” with the other professionals involved. As these pieces ultimately need to connect, it puts pressure on the Divorcing Homeowner to connect the pieces…when typically the Divorcing Homeowner is not an expert at any 1 (much less all) of the puzzle pieces…oh yeah, and they are asked to connect these pieces amidst arguably the most emotionally traumatic time of their lives. As professionals, we can do better.
The value of a Certified Divorce Lending Professional (CDLP)
Among the ongoing advanced training that Certified Divorce Lending Professionals (CDLP's) have endured, include (but are not limited to):
- Recognizing potential legal & tax implications with regard to mortgage financing in divorce situations
- Specific Mortgage Underwriting Guidelines pertaining to divorce
- Ability to identify potential concerns with support/maintenance structures that may conflict with mortgage financing opportunities
- Potential capital gains concerns with regard to the disposition of marital real estate
- Knowledge to allow Divorcing Homeowners (and their Attorneys) to implement a strategic divorce settlement agreement to ensure the best opportunities to secure mortgage financing post-decree
- Recommending financing strategies to help Divorcing Homeowners identify mortgage financing opportunities for maintaining the current marital home while helping to ensure the ability to achieve future financing for the departing spouse
- A CDLP is qualified to work with divorce professionals in a collaborative setting.
- CDLP's can provide opportunities in restructuring a real estate portfolio to increase available cash flow when needed
- CDLP's maintain a commitment to remaining educated and up to date in the ever-changing industry guidelines and tax rules as they pertain to divorce situations
- CDLP's are committed to providing a higher level of service to you and your divorcing clients.
About the Author of this article
Jason Gordon is a Divorce Mortgage Specialist with extensive experience working with Divorcing Homeowners & Home Buyers. As the only Mortgage and/or Real Estate professional in the country to earn a CDLP, CDRE, CDS, and RCS-D, Jason has been trained to proactively identify obstacles divorcing clients face when trying to obtain mortgage financing. Jason also provides collaborative guidance during the settlement process to better enable future mortgage financing opportunities.
Please contact Jason Gordon directly if you are a Divorce Attorney seeking Expert Services for your active court cases.
To download Jason Gordon's CV, please CLICK HERE
Jason Gordon provides complimentary consultations to Divorcing Homeowners to help them understand their true options with the residential debt they owe. Oftentimes, the mortgage on the home is in BOTH of their names, when only ONE of them intends to retain the marital home. As you can probably imagine, there are a myriad of potential outcomes, mortgage underwriting guidelines & logistics to consider for both the “In Spouse” (the one keeping the marital home) and the “Out Spouse” (the one moving out of the marital home). Similar consultative planning would be implemented in the event the marital home is to be sold.
Simply put, Jason Gordon helps these Divorcing Homeowners make informed decisions based on FACTS rather than risking them making their own conclusions based on assumptions and/or emotions. He works carefully with Family Law Attorneys along with other parties involved in a marital divorce to help collaborate solutions, while proactively uncovering potential pitfalls in advance.
Jason Gordon's services are complimentary & professional (and extremely “non-salesy”). Instead, his hope with these meetings is to “do right” with these Folks at a time where they need all the accurate guidance they can obtain. Amidst these meetings, Jason Gordon seeks to earn the trust, respect (and business when desired/appropriate) from these Divorcing Homeowners as well becoming a valued member of the “Divorce Team” to Family Law Attorneys, and the colleagues they may recommend. Please feel free to facilitate introductions at any time if/when you feel Jason Gordon might be a good resource for any Divorcing Homeowners and/or the Professionals who serve them.