I'm getting divorced! How do I choose a mortgage lender to help me complete a spousal buyout refinance or purchase?

Considerations when choosing your mortgage professional during a divorce

So you're considering a divorce, or maybe you're already in the middle of one. How do you choose the best mortgage lender to help you complete a buyout?

Variety of lending solutions
Exception Lending offers a wide variety of loan products including private money loans, bridge loans, specialty loans, asset-based loans, along with all the low-rate "plain vanilla" type mortgages you could obtain from a bank or credit union. Many clients--and lenders--may not be aware that guidelines differ from lender to lender, and solutions that may work in theory for clients mid-divorce are not right for every client. Sometimes clients receive a large settlement, but have unstable income. Sometimes child support or alimony obligations make DTI ratios much higher than are allowed on many products.  By offering a very wide variety of loan types, including specialty and private money lending options, we  can often overcome obstacles that arise when relying on more "plain vanilla" loan products that most lenders offer.

Does the lender work for a bank, corporate mortgage lender, or are they independent?
As an independent mortgage broker, our focus is always on the client. Whether a client needs something simple or very complex, Exception Lending can craft a solution that works in the moment, and which considers the client's long-term financial plans. 

Will the lender work directly with me and my attorney while drafting my MSA (marital settlement agreement)?
This is a critical question, because in many cases, the court order and MSA contain the most critical information about income, liabilities and assets that lenders must use when approving a client for a mortgage.  For instance, a family support payment that will continue for 3+ years can be used as qualifying income. A lump sum payment may seem preferable, but for a client who is re-entering the workforce or will be a stay at home parent, monthly support payments will offer a higher probability of qualifying for lower-rate mortgages--and can certainly still be combined with lump-sum settlement payments to be used for reserves or a downpayment on a new property. 

Has that mortgage professional worked with other divorcing clients?
With over $500 million of mortgage lending completed, a personal divorce experience, and working with many couples and individuals experiencing divorce, I bring a broad perspective of the process, and understand the emotional, financial, and legal obstacles that must be considered during or after the divorce process. I have also personally experienced a divorce which did involve property buyouts mid-divorce, requiring stipulations and creative financing, along with a 1031 exchange of my portion of one property, which has probably offered me the deepest understanding of the client's point of view during this extremely stressful and uncertain time.

Can my lender work with me in the middle of the divorce?
Many mortgage lenders just can't, even if they are highly experienced. Most regular lending programs require an executed MSA in order to fund a loan. This can be incredibly upsetting for a divorcing client who may want to remove a soon-to-be ex-spouse from a property before the MSA has been completed.

By offering private money lending options, Exception Lending can often help divorcing clients complete a property buyout before a final MSA has been executed. A signed purchase or buyout agreement, or stipulation outlining the terms of the buyout, will be needed for a buyout refinance.

Is it better to work with a lender with a "CDLP / Certified Divorce Lending Professional" certification? 

Only you can decide. The most important consideration when choosing your lending professional is a combination of experience and relationship. Not every lender is going to feel like someone you "click" with. Take the time to ask your attorney for a referral, and have an intro conversation with more than one mortgage professional so you are able to choose someone you feel comfortable with. The divorce process is emotional, time intensive, and stressful. Your mortgage lender should treat you with respect, empathy and patience--and be ready to move forward when you are. 

What else can you tell me about the CDLP certification or designation?

The CDLP designation is a professional certification program offered by the Divorce Lending Association. This designation is a copyrighted term, and no mortgage professional may claim they have this certification or designation unless they have completed the coursework offered exclusively by the Divorce Lending Association. These designations confirm that professionals are serious about their training, and intend to build a practice with divorce lending as a core offering. The coursework is a substantial financial investment upfront, that also requires an annual membership fee in order to continue using the designation term, which also comes with a directory listing for the mortgage lenders that pay this annual fee.

Years of mortgage experience may prepare a non-certified lender to be an outstanding resource during a divorce, even without the CDLP designation.

Curriculum from the DLA includes:

- Divorce and mortgage planning fundamentals

- Key legal considerations and updates

- Strategies for optimizing financial and tax outcomes

- Advanced approaches to structuring mortgage solutions

- Effective communication with clients throughout the process

- Navigating legal and ethical responsibilities

- Marketing and business development within the divorce lending space

For more information about this designation, you may visit the website for the DLA and even interview other mortgage lenders to see how they compare to working with Exception Lending. 

Is Exception Lending a Certified Divorce Lending Professional "CDLP"? 
No. Although I have not obtained the Certified Divorce Lending Professional designation myself, I've successfully assisted many clients who are separated, or in some stage of the divorce process. Sometimes this relationship with my clients spans many months, as divorce can take time. I maintain frequent contact with the Family Law attorneys I'm connected with. More importantly, I've successfully helped many clients to plan for and complete buyouts, 1031 exchanges, and purchases during and after divorce. 

* refer to the IRS website for current tax information, or consult your CPA, financial advisor, attorney or tax preparer for additional information. The information included in this article is meant to prompt discussion and is not meant to be a substitute for the advice of a licensed, experienced legal, tax, or financial professional.