Divorcing couples often find themselves at a loss when trying to determine how to handle what is often their largest asset, the family home. Who stays in the home? What does the person who is leaving the home do for a substitute home? How do you finance these decisions?
On this episode of Welcome to Splitsville, we have invited Senior Mortgage Consultant Rebecca Richardson to help answer some of those questions. With over 19 years of experience, Rebecca acts as a partner for divorcing couples as they navigate their options and develop strategies to move forward successfully with financing or refinancing a home. 3:06
Rebecca examines relevant mortgage information and guidelines divorcing couples should understand. How do shared debts, child support, and alimony factor into financing and refinancing? Because a divorcing person may be facing home-buying alone for the first time it can feel like a daunting task. Rebecca understands that a significant part of her job is to provide her clients with a sense of safety and comfort throughout the process. 4:06
She also reveals the answer to a frequently asked question, what to do if your name is associated with the debts of your partner. What debt are you legally on the hook for? For most debts, the first place to look is the agreements and contracts that formalized the debt relationship. 16:40
For more information on Rebecca Richardson and her practice, visit rebeccarichardsonmortgage.com. You can also connect with Rebecca on LinkedIn and Facebook and @The.Mortgage.Mentor on Instagram and TikTok.
The insights and views presented in “Welcome to Splitsville” are for general information purposes only and should not be taken as legal advice for any individual case or situation. Nor does tuning in to this podcast constitute an attorney-client relationship of any kind. If you’re ready for compassionate and reliable legal guidance on your journey through divorce, contact Leigh Sellers and her team at www.TouchstoneFamilyLaw.com[spp-transcript]
Intro: 00:01 Hello, there. Going through a divorce? Considering one? Sorry to hear that, but here you are. Welcome to Splitsville. You’ll find Splitsville to be a pretty unique place, a new world really, with its own rules, its own expectations and in many ways, its own language. But don’t worry, you have a knowledgeable guide along the way, a family law attorney with three decades of experience under her belt. And now, here she is, your host and guide Leigh Sellers.
Leigh Sellers: 00:36 Hello. Today, we are talking to Rebecca Richardson, Wyndham Capital Mortgage and very excited to have Rebecca onboard today. She has some wonderful information for her own clients and for our listeners. I met Rebecca couple of years ago and have found her to be a great resource to send clients to. I think everybody who if you’re fortunate enough in your marriage, your largest asset is often your real estate and the family home, a large percentage of people. When we’re working with divorce and separation, what to do with that home and who stays in it? And then what does the person who’s leaving the home do for a substitute home? Those are really important conversations. And how you fund and finance these decisions even becomes more critical. Rebecca’s been a great resource to clients, to be a partner in making those decisions when we’re working together in the legal field. Rebecca, welcome.
Rebecca Richardson: 01:42 Thank you for having me.
Leigh Sellers: 01:44 I know you work with Wyndham Capital Mortgage, but why don’t you tell the listeners specifically what your role is and what you do for people who come to you?
Rebecca Richardson: 01:53 I am a senior mortgage consultant. That means for the past 19 years, what I’ve done is help people qualify for mortgages, come up with a strategy, understand guidelines. We go by many names, loan officer, originator, it’s all basically the same thing. We’re here to help you get from point A to point B when it comes to anything to do with financing or refinancing a home.
Leigh Sellers: 02:13 Wonderful. And so always like to uncover, you’re the rough draft in some ways. You’re where everybody gets to go through and do their application and then mark it up and keep fixing it until it’s actually got the information in a format that is most likely to be approved.
Rebecca Richardson: 02:33 Exactly. That’s one of the first steps is basically to say, “What are your goals for whatever you’re doing? You’re purchasing a home, you’re refinancing a home, what is your current position in terms of income, assets, preferences on payments, sales price, all those kind of things?” And then the way that I explain it to people that my job is is to take all those mixed up pieces and put them in order like a Rubik’s Cube. And then it goes through the normal process of being underwritten, which means the information that’s presented is verified, matched up against loan guidelines, make sure that it meets those loan guidelines and then the loan is approved.
Leigh Sellers: 03:06 Wonderful. Well, there’s a lot of new information going out there for first time home buyers and that’s a wonderful resource. But what I find is interesting is sometimes you’re a first time home buyer, they’re not really a first time home buyer, but it’s the first time that they’ve had to do it on their own. They’ve bought their first home together with their spouse. And so it’s kind of a different animal when they have to step outside of that financial partnership and relationship and they’re almost going back to where they might’ve been in their 20s if they were buying it. Why don’t you tell us, you were talking about mortgage guidelines and we’re going to be talking about this all in the context of divorce or separation. Why don’t you talk about what makes those mortgages a little bit different or a little bit more challenging or what guidelines you think are particularly relevant to people who are going through a divorce and separation?
Rebecca Richardson: 04:06 For sure. And to echo what you said is a sentiment that I hear a lot of times when I’m working with clients that are going through separation or divorce is, “I own a home, but I don’t know what I’m doing.” And it’s in the midst of everything else going on. It can be very unsettling to acknowledge, admit, that you don’t know what you don’t know. Or you don’t have your partner there that maybe either they handled it or it was just a sounding board or things like that. Try to always give that reassurance that I understand being in that position. I understand that mindset and that’s part of why it’s my passion of working with clients that are separated and divorced, because it takes a certain finesse to understand that you know what it’s like to be a homeowner, but maybe you don’t understand what this exact process is like.
Rebecca Richardson: 04:48 For clients that are going through a separation or divorce, how that process then intersects with mortgages tends to, if there’s going to be discussion or later, if there’s going to be an issue, meaning that something maybe had already been settled out and then they’re coming to me to kind of execute on whatever it is that they want to do, refinance or buy, most of the time those topics fall into either dealing with income, in a sense of child support and alimony, dealing with any kind of joint or shared debts and then also there’s kind of a special guideline that’s particularly for people who are separating or divorced, when it comes to an equity buyout as a part of a refinance. Most of the time, our conversations around just normal mortgage guidelines go a little bit further in one of those or several of those categories.
Leigh Sellers: 05:37 Well, let’s talk about income first, because it comes up a lot in two different ways, but when we’ve had one household combining incomes and living off of joint incomes and joint checking accounts and now we’re getting ready to end that, sometimes still redistributing that income via, like you said, child support or alimony. And so this topic would be important to someone who is paying it and someone who’s receiving it. Why don’t we talk about how child support and alimony count as income for a recipient and what the impact is on a payor as well?
Rebecca Richardson: 06:16 Perfect. The biggest thing is going to be around time and that’s how long has that child support or alimony been received? As kind of a side note to that, let’s say that my client is refinancing or purchasing a home and part of the income that we’re going to be basing that loan off of is income that they are earning by re-entering the workforce. Perhaps they’ve been out of the workforce for a while and now they’re reentering the workforce. In order to count income after there’s been a gap of employment, that they do have to be at that job in most instances for at least six months. That’s one of the timelines that sometimes we’re looking at as far as when we can move forward with a new mortgage.
Rebecca Richardson: 06:56 But specifically to child support and alimony, it depends on the type of loan that that borrower is going to get. If they are getting an FHA loan, which sometimes is the right fit for them, then it has a shorter timeline. Once they have documented receipt of child support and alimony for at least three months, then we’re able to proceed with using that income as qualifying income. If a conventional loan is the best bet, meaning that it, or loan amount or rate payment, all those kind of things, and if the conventional is the right, then they do need to have the income for at least six months documented receipt, regular payment, and before we’re able to close on that loan.
Rebecca Richardson: 07:34 Part of the reason that that’s helpful to understand is sometimes clients come to me and the situation has been as maybe they’re still in the marital home and some of the obligations like the mortgage or child care expenses or just living expenses or things like that might have been paid by the departing spouse and they’re paying those bills, which is pretty equal to what that child support and alimony is going to be or is planned to be but it doesn’t count because it’s not going into the recipient’s bank account. You have to actually document those regular transfers or those regular payments into the recipient’s account in order for that income to be considered qualifying income. It can’t be supplemented by paying bills and things like that. That’s sometimes where I think I see things get tripped up.
Leigh Sellers: 08:24 Sure. If your spouse says, “Hey, the six month car insurance payments premium’s up this month, why don’t I just pay that?” Or, “Why don’t you just pay that for me and take it out of my child support?” That’s actually a mistake. For purposes of trying to then use your child support for income.
Rebecca Richardson: 08:43 Exactly. Because it’s, again, at the end of the day, guidelines tend to be pretty black and white. And if it says that the spousal support is 3,500, we’re going to be looking for 3,500 coming into that account every month. That doesn’t mean that it has to have happened for us to say, start the process, but we have to make sure that before final loan approval can be given, let’s say that you go under contract for a home once you’ve received that fourth payment, or maybe that fifth payment, as long as the sixth payment is received prior to final loan approval, that’s fine. But it’s the timing of all of that is very important.
Leigh Sellers: 09:17 What if you are the one paying it? You’re going in to apply and you’ve got your W2s and you’ve got your pay stubs and you’re not paying two wage withholding so it’s not showing on your pay stub, what does the mortgage guidelines, how do they impact what your obligation to pay is?
Rebecca Richardson: 09:38 One of the questions that gets asked on a loan application is, “Do you have any kind of obligations or are there any kind of obligations like child support and alimony that does have to be disclosed?” Because the name of the game, when it comes to mortgages is documentation. If it’s not disclosed, most time we’re going to see a transfer occurring, so it’s best to be up front with it so we can make sure that we’re factoring that in from the beginning and it’s not a surprise. Most of the time it’s whatever the situation is right now. Sometimes if there is say decreasing amounts next year or in two years or things like that, we do have to go off of what the situation with those payments are now.
Leigh Sellers: 10:14 Even if you had some sort of step down provision or it was already clear in the order, child support is being reduced in 12 months because everybody already knows the child’s graduating from high school or the alimony is starting high and getting lower because it’s anticipated that the receiving spouse is re-entered the workforce, you’re going to have to deal with what it is at the time of the mortgage application.
Rebecca Richardson: 10:41 That’s right. It’s what the situation is right now. When it’s on the payor side, it’s what is the situation basically as of the note date, as of closing. And then for the recipients, it’s more what has happened and what will happen? That’s where a part of it leads into a big piece or where sometimes I see things get tripped up is around continuance. And that means, how long are they going to receive the child support and alimony? Because they do have to receive it for at least three years from closing. Sometimes how that can kind of sneak up on people is if let’s say that maybe child support is being received until a child finishes high school. Well, if they’re a sophomore, then you’re short those three years and even though the income may at this time be significant and regular and all of that, if it’s not going to continue for those three years then unfortunately that doesn’t meet guidelines and it’s not going to be income that we can use.
Leigh Sellers: 11:34 What about when you have somebody who is either for alimony or child support, receiving a percentage of commissions or bonuses. We live in a banking town and a lot of the banks for many positions, they structure their pay heavily on commission and their base pay is not nearly as sizable as the commissions they’re receiving. If you’ve got somebody who’s paying all year based on base pay and then doing a percentage of the income, how does that work?
Rebecca Richardson: 12:07 First of all, if it’s a new arrangement, so the recipient hasn’t received any of the percentage of commission or bonus, most situations there isn’t a basis there for us to count receipt. Because there’s not a history of receipt so there’s not really anything for us to document. We can document the payor’s receipt of their bonus and commission, we have the agreement that says a percentage, but most of the time it’s not considered stable income because it hasn’t actually been received by our client yet so it doesn’t meet that three month, six month, that sort of standard. If it’s something that they have received for one to two years and we have a history saying, “Okay, January 15th of last year, they received a bonus of X.” Then we can average that out as an annual income and that can be factored in, but the recipient has to be able to document that they’ve actually received it.
Leigh Sellers: 12:59 And it’s the recipient, it doesn’t really help me to come in with the proof of the payor’s receipts traditionally.
Rebecca Richardson: 13:10 Correct.
Leigh Sellers: 13:12 It’s the actual applicants being able to show they’ve received it.
Rebecca Richardson: 13:15 Correct.
Leigh Sellers: 13:16 If they’ve received it for a couple of years, is that something that would work?
Rebecca Richardson: 13:21 Yes, it definitely can. Which sort of seems extreme because if they don’t make that payment, then they’re going to be in contempt and then you’ll be stepping back in and doing what you do. But again, because the burden of proof is on the applicant to show that they’ve actually received those payments, there’s no history of that yet.
Leigh Sellers: 13:40 Most people are aware that there’s a tax fall change where alimony is no longer tax deductible and yet child support has some terminating factors considering emancipation and some things like that. There’s a lot of people who are going towards just using the word support and they’re not actually saying whether it’s child support or alimony, they’re not breaking it down. And there’s a lot of reasons we can talk to you why attorneys do that sometimes. But if you just have somebody come in and it’s kind of just vague and it doesn’t say whether it’s alimony or child support, can that still count as income if they’re not using the buzzwords?
Rebecca Richardson: 14:18 It can be used. We are going to be looking for, so a rose by any other name. It can have another terminology, but it does have to at least have the framework around. When did the payments began? What will they be? When will they end? Or what are the conditions around when it ends? Because we have to make sure that, again, that at least the number of months receipt has occurred, that we can tie bank statements to that exact amount or more. And we know that it will at least continue for three years.
Leigh Sellers: 14:47 Pretty much the same guidelines.
Rebecca Richardson: 14:48 Mm-hmm (affirmative). It can be differently and just needs to make sure that it has at least a big part is when does it start and when does it end?
Leigh Sellers: 14:55 I have some clients that are really, for a lot of different reasons, they’re either interested or paying an alimony obligation in one lump sum or in receiving one lump sum rather than taking the payments over the years. Obviously that’s going to not work with your three year goal because you would arguably get it once. Can that be counted as income?
Rebecca Richardson: 15:26 There’s sort of a creative work around that that fits guidelines. What you can do with those type of payout, I guess if you want, is that you can take it as a lump sum, put it into an annuity that does not have an age restriction on when distributions can begin, begin taking those distributions and then instead of dealing with income guidelines around separation and divorce, then that essentially flips us over into guidelines around annuity income. And with annuity income, once you start taking distributions, you only have to take distributions for one month for it to be considered usable income. You do have to document that there’s enough in the annuity to give those distributions for three years so that’s where again, the three years, that magical time, does come into the picture, but you don’t have to then say receive it for six months in order to proceed.
Leigh Sellers: 16:12 Well, that’s interesting. Anybody who’s ever applied for any sort of financing knows that your credit score and your debt to income ratio is pretty important. When you’re married, some people have joint credit cards, literally real joint credit cards, and they don’t stay joint, usually. Typically in divorce law, it’s going to get given to one or the other party. What do you do if you’re applying and your name is associated with a lot of debts, but you’re not legally the one who’s required to pay them?
Rebecca Richardson: 16:49 What we’re going to be looking for in that situation is an agreement that states that it’s the other party’s responsibility. Even though it’s still contributing to your credit score, even though you’re still from a creditor standpoint, still legally obligated for it, from a mortgage standpoint of what we’re counting in that debt to income ratio, we can exclude those debts.
Leigh Sellers: 17:10 We see that happen really most with cars.
Rebecca Richardson: 17:14 Yes. And that’s where, again, kind of what I have seen in agreements that have caused issue later on is details matter. Being specific helps a lot. It needs to say specifically, “This account with this account number or this account with this creditor or this car with this VIN number,” something that we can go back and document and say, “Yes, this specific account can be excluded because it’s addressed directly in whatever agreement they’ve worked out.”
Leigh Sellers: 17:45 And so to me, that make me benefit, but it’s equally important to do that if it’s a car being provided for, it’s filed to you but it’s got debt associated with it, you probably need to be very specific about who’s responsible for the debt for that car.
Rebecca Richardson: 18:00 Yes. Yes. And that goes to any jointly owned properties. If there’s vacation home, land, things like that, if it’s not specified who’s being awarded that property and who’s responsible for any of the costs, the debt, whatever, then we have to count. Or if let’s say that that something’s trying to happen before there’s been an agreement, then we’re going to have to count that property’s mortgage payment, that property’s taxes, insurance, all of that until essentially we have an agreement that says, “No, it’s not our client’s responsibility. It’s the other party’s responsibility.”
Leigh Sellers: 18:35 I’m guessing that works a lot for timeshares too.
Rebecca Richardson: 18:38 Yes, yes.
Leigh Sellers: 18:42 My favorite thing to have to try to divide.
Rebecca Richardson: 18:44 Yes.
Leigh Sellers: 18:45 What if you have somebody who really is just getting a lot of property, they don’t want to, it’s just one of those situations where they’re really just dividing the assets and there’s not going to be any support. Would the asset distribution that they get impact it at all if there was clearly a lot of assets, but they’re trying to apply for a mortgage and they don’t have any alimony or child support?
Rebecca Richardson: 19:12 The short answer is no. The longer answer is, I explain to people that mortgages work kind of like a three legged stool. You have income, assets and credit and all of those have to be present for the mortgage to stand. Receiving a large bulk of assets, but then no income then we’re looking at, okay, then how do we kind of build that income pillar? Is it doing the annuity like I mentioned? Is it having a co-borrower? Sometimes people have their parents or a sibling via co-borrower so they can fill kind of the income piece.
Leigh Sellers: 19:44 What are some of the things that you’ve seen as you’re sitting here, helping people, people are probably bringing in these documents and you’re asking to see a separation agreements and divorce decrees. What are some things that you’ve seen that were missing or were problematic when you’re looking at these documents? Obviously every attorney is a little bit different, but we also have a lot of people who are attempting to resolve these things for themselves and they don’t even see an attorney.
Rebecca Richardson: 20:13 I would say that it falls into two categories. One is either not enough detail, so we need to know who’s getting what down to account numbers, something that we can tie it together. Not having enough detail then means that in the absence of that information, we basically have to default to the most conservative option is and that’s probably counting more debt that even if they say, “Hey, they’ve been paying this for the last six months,” well, we still can’t exclude it. Then that debt or expense is going to have to be counted for them or not having the timelines match. Not kind of beginning with an end in mind.
Rebecca Richardson: 20:48 It’s let’s say that one of the parties is staying in the home and they either need to refinance or sell within the next three months. If again, we’re coming back to the income situation. If we need six months of income in order to qualify for that mortgage, then you’re sort of backing yourself into a corner that it just, it can’t be accomplished. You have to make sure that things are going to be in the order that they need to happen to meet both what the intention of both of the parties, that intention and then also be able to meet what mortgages are actually able to accomplish. Because if not, then again, we’re trying to kind of bandaid on some sort of fix a co-borrower, a parent, a sibling to meet that guideline that can’t be met based off of what the timeline has to be.
Leigh Sellers: 21:33 What about a person who they just don’t get any legal documentation as to alimony or child support and their ex-spouse is simply just making regular payments based on they have a good relationship and they’re honoring this commitment so they’re making regular transfers, but there’s no legal obligation, how does that work?
Rebecca Richardson: 21:56 In that, in that case, if we have 12 months of a continuous pattern, then we can count what they’ve received. It does have to be at least the same amount, something that we can show. Let’s say that they have been receiving payments for 12 months and the most recent six months it’s been stepped up by maybe $250. We can use the most recent six month average, but we do have to show receipt for at least 12 months.
Leigh Sellers: 22:21 And that’s because you don’t have the duration in there.
Rebecca Richardson: 22:23 That’s right. Yeah.
Leigh Sellers: 22:25 You can’t stick with your six month.
Rebecca Richardson: 22:28 Right. Right. It does. That’s also sometimes when we are getting into in an absence of an agreement. Is it reasonable that they would continue to receive it? Is their child 17? Well, that’s a gray area, but that’s probably not going to continue. Is their child four years old? Okay, then that’s reasonable to count.
Leigh Sellers: 22:49 Buying out of equity on the home, this is often, so we’ve talked a little bit about just a complete refinance where and I think of that is when you’re taking the existing liability and just one person’s sustaining it instead of the other people or both people. But sometimes people need to borrow extra money to either buy out their other spouse’s interest or a portion of that interest. Are there any distinctions or differences when you’re coming back in and you’re not just trying to reassume the same debt but you’re going to have to basically make a new one for a different amount?
Rebecca Richardson: 23:25 Yes. This is one of my favorite kind of hidden gems in mortgage guidelines is if somebody is going through a separation and divorce and part of their agreement is an equity buyout, then that amount can be included in the new mortgage as a debt, sort of just like the mortgage that they’re paying off. But it does us to treat that mortgage as what’s called a rate term refinance. We’re refinancing to change the rate, we’re refinancing to change the term, the rates tend to be better with a rate term refinance. And also it does allow us to go up to 95% of what the new appraised value is. It allows them to tap into more of the asset to settle the liability associated with that asset versus having to tap into other 401(k), retirement funds, things like that.
Rebecca Richardson: 24:14 And the reason that I like that as well is because a lot of times people think that, oh, for me to get cash out of my home to satisfy this requirement, I have to do what’s called a cash out refinance. Cash out refinance will carry a higher rate and it also caps you at 80% of the appraised value. It limits how much money they can actually get back. And most of the time, because of how that equity settlement is being calculated, they’re then having to pull from some other resource, which could actually harm them long term by pulling money out of investments or things like that.
Leigh Sellers: 24:43 It would really help if the document was super specific that they’re required.
Rebecca Richardson: 24:47 Yes. And most of the time what we’re looking for in this situation is for the agreement to say it’s an amount. It’s 20,000, it’s 30,000 or it’s a percentage of the appraisal that is done associated with refinance. Not all refinances need an appraisal. Either we can go ahead, even if one isn’t needed, we can go ahead and order one, so a third party kind of establishing that value. Some people are satisfied if a realtor, maybe that they used to purchase that home, if they do comparative market analysis and say what the home is worth. We don’t really necessarily care as long as whatever is in the agreement can be met. That basically the parties are happy with how that number has been decided.
Leigh Sellers: 25:29 There are for a variety of reasons, there are people who aren’t comfortable or they’ll say, “I don’t trust my spouse will pay the bill. That bill’s in my name and that mortgage is only in my name and I don’t trust them to pay it and say, I’m going to pay the mortgage but I’m not going to give you the money to pay the mortgage yourself.” Can you look at that as support when you’re looking at the income if they’re paying the bills? The person’s getting the benefit of money, but they’re not getting money.
Rebecca Richardson: 25:59 That’s right. No, they have to get the money. Sometimes how I’ve seen that happen is there is a joint account that the money comes from the payor into a joint account, then you see the mortgage go out. That’s not as clear as it going from the husband to the ex-wife and then ex-wife paying the mortgage. It does muddy the waters for sure, but just paying the bill doesn’t replace the income support.
Leigh Sellers: 26:26 What documents would you tell someone to bring in? And when would you have them start talking to you, if they were interested in buying out their spouse’s interest or interested in keeping the home and moving the liability to their name? What do you guys need to see?
Rebecca Richardson: 26:45 We need to see any kind of equitable distribution agreement, separation agreement, however that asset and liability is being addressed, that’s what we’ll be looking for. I always tell people the earlier the better. I have looked at agreements before they’ve even been signed because their attorney has advised, “Hey, make sure that what we’re trying to do here is what we can actually do once this has been signed.” That’s ideal just to make sure that we’re all on the same page and it can be executed the way that it’s intended. Again, earlier the better, meaning that if let’s say that they need to buy or refinance by next April, absolutely happy to have that conversation now, make sure that all those pieces are starting to fall into place now. When that timeline that they have to hit comes up, that those pieces have already been put into place and we’re not trying to again, trying to bandaid on a solution.
Leigh Sellers: 27:37 What about payments that are coming out of joint accounts? The parties are still using a joint account, maybe one of them is exclusively using it, the another person isn’t at all accessing it anymore but does it make any difference if it’s a joint account versus a single account?
Rebecca Richardson: 27:54 It depends what we’re talking about. Again, it’s kind of like, is money being put in there to pay a debt? Great. It’s always cleaner if those finances are separated. When it’s something that is joint like that and maybe only one party is using it, we’re then going to be still defaulting back to either an agreement that’s in place or ask for there to be an agreement put into place as far as who is actually responsible for what.
Leigh Sellers: 28:18 Because I know some people, they’re just, it’s just an extra detail. Going to the bank used to be a little simpler to get somebody’s name quote unquote off of an account. But a lot of times now you want to close it down. And yet everybody’s got all these automatic drafts scheduled and so people don’t move as quickly on that as they once did. But as long as you can really track the money, if somebody’s been paying their child support or alimony into a joint account that their name’s still on, you can still treat it as just the recipient’s money.
Rebecca Richardson: 28:53 Correct. Because most of the time, what we’re actually seeing is the money go from the donor to a joint account and then in a lump sum then the child support or alimony being moved into the recipient’s account. If there’s sort of a middle stopping over point, because maybe there are shared expenses like medical expenses or support of a child at college or whatever the case may be, we’re going to have to typically paper trail where that money’s ending up.
Leigh Sellers: 29:19 I used to hear this and I’ll let you correct me because it could just be old rules, but I used to hear that mortgage companies were looking to have proof that the person who was applying had actually been paying the mortgage themself for six months, is there any guideline if you’re coming into refinance where you have to prove that you had been paying it or you have any track record of paying it?
Rebecca Richardson: 29:49 It’s not so much that you have to prove that you have been paying the mortgage. In the case of a separation or divorce file, you do have to have been on title. You do have to be on title for at least 12 months.
Leigh Sellers: 30:00 Okay. In North Carolina, we don’t really have a problem with that because the law generally provides, there are some exceptions, but most spouses are on any deed to real estate purchase during their marriage. But in South Carolina, there’s no rule about that so if you’re trying to go in and refinance a house that your name isn’t on and the order says that upon refinance or during the process, it’ll be deeded is that going to be a problem? Because you’re not even on the deed?
Rebecca Richardson: 30:33 Right. But what we’ve had in the past is sometimes that looks like doing a quick claim to put the other spouse on title and then having to wait out those 12 months in order to then do the buyout, do the refinance.
Leigh Sellers: 30:46 Obviously we as attorneys usually check the title. A lot of people do not know. They’ll come in and you’ll say, “Are both of your names on the title? Is it only your name or the other spouse’s name?” And they’ll either tell me an answer that turns out not to be accurate when I get the deed or they’ll honestly say, “I just don’t know.”
Rebecca Richardson: 31:07 Sure. Home owning is not something that you deal with all the time, who knows?
Leigh Sellers: 31:12 Well, do you have any other advice that you would give separating or recently divorced spouses who are contemplating either home purchase?
Rebecca Richardson: 31:22 My message would be just probably one of encouragement that a lot of times, because as long as again, we can know what the end intent is, being involved in that preparation or being involved in that conversation early. A lot of times we can craft whatever needs to happen to achieve what their goal is. It can be very discouraging to come in and want to move forward with this next stage of your life and certainly your home is a big part of that and be told, “No, you have to wait. You don’t have to wait three months, six months, maybe it’s 12 months,” whatever the case may be.
Rebecca Richardson: 31:54 Being able to kind of set those expectations early helps. But the nice thing is with, as you know, when you’re crafting agreements, everything’s on the table. A lot of times there is a way to make it work if we can get ahead of it. And just to understand, there are many conversations I’ve had with clients where they’re not sure that they can keep the house or they’re not sure that they can purchase a house on their own. We’re not scary. I’m not a scary person. I am here to help and that’s what I love to do is to try to come up with a plan that helps somebody meet what their goals are.
Leigh Sellers: 32:27 Say, Rebecca, if someone is listening to this that would like to get more information from you or maybe come and talk to you about what their plans are, what’s the easiest way for them to find you? Because Wyndham’s are a big company.
Rebecca Richardson: 32:39 Yes. My individual website is rebeccarichardsonmortgage.com. On pretty much all social media. I’m the.mortgage.mentor, so the Mortgage Mentor. You can find me on Instagram, TikTok, I’m on LinkedIn and Facebook and I am licensed in nine states so it’s not just in the Carolinas. And certainly if somebody has a question and then it’s a state that I’m not licensed in, I’ve got a great network of colleagues that also know guidelines as well as I do that I can connect them with.
Leigh Sellers: 33:07 Well, wonderful. Well, we’ll have that information in our bio and show notes if anyone didn’t write it down. But Rebecca, we thank you for being here and sharing all of this information for our listeners. It’s very informative and every time I talk to you, I learn something more.
Rebecca Richardson: 33:25 Well, thank you for having me.
Leigh Sellers: 33:26 I appreciate it. Thank you.
Rebecca Richardson: 33:31 Thank you.
Leigh Sellers: 33:31 There you have it. Another neighborhood of Splitsville explored. There’s still so much to learn here so I hope you’ll tune in to the next episode. While Splitsville is not a fun place to be, thankfully it is full of helpful people, valuable resources and sound advice if you know where to look, see you, next time.
Outro: 33:53 The insights and views presented in Welcome to Splitsville are for general information purposes only and should not be taken as legal advice for any individual case or situation, nor does tuning into this podcast constitute an attorney client relationship of any kind. If you’re ready for compassionate and reliable legal guidance on your journey, contact Leigh Sellers and her team at www.touchstonefamilylaw.com.[/spp-transcript]