Can You Keep the House in Divorce?

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Welcome back to Doing Divorce Different.

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I'm so happy that you're here today,

and I think the conversation today

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is gonna give you lots of information

about whether you can keep your home

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when you're going through a divorce.

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We're gonna talk about all divorce things.

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I have my friend Brett Leshinski.

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I can't believe I can actually

just say your name with ease now.

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Speaker 2: It's a hard one to

get past, but it's not too bad.

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Speaker: It's not

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Speaker 2: too bad.

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After you get it, you

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Speaker: get it.

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Yeah.

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But Brett is, he's one of the

best divorce morgas- mortgage

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specialists that I work with.

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And Brett, honestly, you're so, um…

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When I send my clients to you, you

respond immediately and you're so

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helpful, and that's so important

when we're going through something

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really scary like divorce.

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And whether you can keep the home

is often one of the top things.

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I say that your kids, what you're

gonna do with your kids is really

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important, and your finances, and

your home's kind of in there because

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you're worried about you wanna keep it

for your kids and can you afford it.

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So I think this is so timely

because things are always changing,

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and so we're gonna get in deep.

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But Brett, can you just share, I

mean, what made you do this work?

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You're a mortgage guy that

helps divorced people.

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What, what got you here?

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Speaker 2: Yeah.

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I, um, I don't know, I got

into this maybe 15 years ago.

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I, I, I've been a loan

officer for about 24 years.

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Um, and I got into…

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I, I just kinda fell

into the divorce niche.

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Um, and I had a past client went through

a divorce and, and I gave them some

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advice when they called me and said they

had to remove a name from a, a loan and,

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uh, and I, and I thought that was true.

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For the other person to go

buy they had to remove a name.

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That, that wasn't true.

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They, the divorce decree can indemnify

them and they can buy a house even

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without their name being off the old loan.

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So I, I gave them bad advice and when I

found that out I, um, uh, I was bothered

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by that and I, I just started digging into

what else during a divorce was different.

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And then I, I just kinda got

obsessed with understanding it.

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I had been through a divorce

myself prior to that, so I, I…

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That, being divorced isn't what got me

into it, but it, it, it kind of made me…

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When you go through a divorce

you wanna help other people-

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Speaker: Mm-hmm

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… Speaker 2: who are going through divorce.

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That's just kinda how it is as, uh, uh…

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So I, I, that, that's what kinda pushed me

into it and I've just, uh, really had…

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I get a lot of, um, um-

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positivity from helping people through

this- Yeah … time in their life.

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'Cause I, I, I know how bad it, it can be.

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Speaker: So.

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I love that.

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And I mean, that's…

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those are the best people.

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Those are most of the people that I have

on the podcast and I work, work with.

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And for me, I think I, because I've

been through something hard, I wanna

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help you through something hard.

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I haven't been through divorce,

but I've got the knowledge,

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you know, from law school.

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And so in your situation, you've been

through it, now you wanna help people.

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Um, so I love that.

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And that's probably why you're

so good at it because you…

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it's, it's your calling.

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That's what I say, my work is my calling.

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I was telling Brett before I got on that

my husband's retired, and it's weird to

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be working, but this is my passion and my

calling, and I'm not ready to stop yet.

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So anyhow, that's a long introduction.

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Welcome, Brett.

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Let's start digging in to, because,

y- like I said, so many of my

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clients really wanna keep their

house, like for their kids' sake.

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And I've had guests on the podcast

who have said, "Be realistic,

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because if you can't afford it,

you're not helping your kids.

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If you're all stressed out, working

all the time trying just keep the

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house to keep them, and they can't

do extra sports that they used to do

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or whatever it is, you really need

to put a lot of thought into this."

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And I feel like clients or

people going through divorce

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need to have all the information.

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And I wish I could work with everyone,

because I do feel like if you work

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with me, we really talk about it.

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Like, we don't just say, "Oh,

yeah, I'm taking over this."

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We go, "Can you?

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Can you afford it?

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Can we look at it?"

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That's when they're gonna call you

to kinda get an idea of what this

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is gonna look like in the future.

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But Brett, so many people going

through divorce might even find out

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that they can assume the mortgage at

a good rate, or they think they can.

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But then they, and then they file for

divorce, they go through it, they think

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it's set, and then the, you know, the

loan officer says, "Oh, no, you can't."

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I mean, things change.

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And so you just have to be so

careful, I find, and you have to make

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sure you have all the information.

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So tell me what's going

on in real estate now.

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I don't even, I don't have a, a

pol- you're gonna help me find

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a cabin- Oh … I know that.

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Yeah.

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Speaker 2: Uh, yeah.

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That's right, yeah.

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Um, so I- But- I, I, I like that

you said that, you know, people

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ha- you had somebody else on

that said, you know, don't…

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people should be weary of trying to keep

the house and, and not being able to let

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go of, um, the house specifically, 'cause

there's so much, you know, memories and

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emotion tied into a house, and the kids.

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Um, and but honestly I, I see a, a

lot of scenarios where, where people

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do it the opposite way, where…

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A- and I, that's advice

that I would add to that.

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I, I think- Mm-hmm … that's

good advice, is to watch being

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too emotional about your financial

decision and getting in over your head.

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But there's also a y- y- yang to that

yin, is when people are I see a lot of

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people who, who just kind of automatically

feel like, or maybe their attorney tells

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them, "Yeah, you gotta sell the house.

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You know, that's just

kind of what you do."

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It's just, it's, it's, it feels like

a default to sell the house when you-

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Mm-hmm … go through a divorce sometimes.

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And, um, sometimes you get that advice

from friends or, or even a professional.

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Um, but a, a lot of times I see where

it's, it's the opposite, where the,

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you know, if somebody can keep the

house and it makes financial sense

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to n- not uproot everything and, and

keep that house, one of them keep

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the house, there's usually one that,

that it makes sense, most sense for.

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But, um, so you kinda

gotta balance both, right?

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Mm-hmm.

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D- don't, don't be too, um, emotional

about it, but then also don't be

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too financial about it, and don't,

or don't be too kind of, um, uh,

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Speaker: just- Afraid maybe?

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Speaker 2: What's that?

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Speaker: Afraid maybe?

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Afraid that you are thinking

that you can't keep it?

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Speaker 2: Yeah.

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Yeah.

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Yeah, that's, that's a

good way to, to put it.

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Yes, afraid.

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Um, you know, it's just been, the

er rates that we've had since: 2002

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basically in January 1st, almost 2022,

rates started going up from about three

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and a quarter to, by November of 2022,

so in just seven months, or sorry,

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s- in just 11 months, it, rates went

from three and a quarter to seven.

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So th- and they've just hovered up there

between the six and an eight range- Mm-hmm

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for the last four years, and that has

just really changed the, the dynamics

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of divorce because the house used to

be kind of the backseat item, right?

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You know, if you ha- if you had to

lose your 3% rate for a three and a

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quarter rate or a three and a half

rate, it just didn't move the needle

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enough to, to try and stress about

how do I remove a name or anything.

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You just refinanced and removed the

name, and took out cash to pay the

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marital settlement at the same time.

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It was, it was just easy.

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Speaker: Yeah, it was.

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But

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Speaker 2: this difference has really

caused the house and the mortgage and

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the, and the, the living arrangement

piece of the divorce to kinda come to the

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front of the discussion topics, right?

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And so I, it, it, it's been, it's been

tougher, and there's that navigation.

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So yeah, it lends itself to,

okay, well, how do I keep my rate?

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Do I, can I do a name delete assumption

and remove the name of my spouse's

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name without- losing my rate.

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Okay, yeah, you can do that, but

how do you get the equity out of the

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house to pay a marital settlement?

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M- assuming you need to.

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Not all divorces, of course, have that,

but that's the most common scenario.

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So, you know, you can either, um,

take out a second mortgage, but

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it depends on how, what, what…

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I mean, I've had people who are

trying to bend over backwards to

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keep their three-and-a-quarter rate

on $80,000, and they have to pay

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out a $200,000 marital settlement.

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So they're gonna run out and get a

$200,000 second mortgage, which is at

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a higher interest rate than the first

mortgage, than any first mortgage,

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because they're in second lien position.

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So now you've got a 8% rate on a, on a

$200,000 loan amount just to preserve

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a three-and-a-quarter rate on $80,000.

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Mm-hmm.

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Doesn't make sense.

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So, you know, j- you just have to look at

it and, and each scenario is different.

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Speaker: That's what I was just gonna say.

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I think what you're kind of showing

is that every situation is different.

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And I know sometimes you can assume

the mortgage, and sometimes you,

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you can't Am, am I wrong there?

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Right?

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Yeah, no, you're right.

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Speaker 2: I mean, everybody-

So this, just a quick rundown of

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the assumptions is you would…

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Your current servicer is the one that you

would go to for an assumption, to contact

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them and figure out if they allow for

assumptions, 'cause not all of them do.

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I mean, back before 2022, the only one,

servicers that were allowing assumptions

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were the big banks, the, you know, Wells

Fargos, US Banks, Chases, whatever.

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And since 2022, a lot of the larger

servicers, uh, credit unions and,

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and other smaller banks have jumped

on, probably because they got…

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They, they had the scenarios in front

of them, and they had to have a board

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meeting and say, "Should we allow these?"

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You know, 'cause it isn't-

Right … didn't come up enough.

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And so some of them said yes,

and some of them said no.

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Um, some of them want to keep…

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The only reason to, to do a

name delete assumption is to,

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because the, the servicer wants

to keep the servicing, right?

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So if…

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But there's hoops to

jump through for that.

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And when you do a name delete assum-

So, so not all servicers allow them,

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first of all, so you just have to

call your servicer and see if they do.

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If they do, they're not gonna add a name.

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So if the s- if the spouse keeping

the house, they have to go through an

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underwriting process, and they have to see

if they qualify for the current monthly

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payment on their own without their soon to

be ex or ex-spouse's income the way they

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both qualified for it originally, right?

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Speaker: Well, and I've, I've

gotta say, Brett, I've had, I've

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heard tell of people who have gone

through this process and were told

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that they could do the assumption.

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Mm-hmm.

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And then because the situation

changed after the divorce and the

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income that person was receiving

changed, they said, "Oh, no, we're

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not d- gonna do this for you."

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So you, you have to make sure that you are

looking at your future finances, correct?

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Speaker 2: A- absolutely.

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Speaker: Yeah.

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Speaker 2: One, one of

the things that the, that-

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Kind of frustrates me actually,

because you call a servicer and most,

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I'd say 90% of the clients I tell,

you know, I just try and help…

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'Cause I don't do qu- I don't

do name delete assumptions.

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I, I can't.

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I'm not their servicer, right?

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I'm a, I'm an originator.

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I originate.

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If they need to refinance,

that's where I can help them.

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Or if they're going, exiting the house

and they wanna go buy a new house, that's

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where I can help them on the timing.

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Can they buy a house before

the divorce is finalized?

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That's a big one that I get.

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Timing is a big deal, and

that's what I can help with.

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But on the name delete assumption

for somebody keeping the house and

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wanting to keep their low rate, I

just tell them, "Go call your servicer

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and see if they do it, first of all.

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And if they do, there's…

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They're…

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You're right.

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You're right to bring this up, because I

bring this up to attorneys all the time.

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It's not just, "Oh, go do a name

delete assumption," because there's

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a lot of parameters that you're,

a lot of assumptions that you're

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assuming in there that they can do

an assumption that shouldn't be.

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So what's…

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So the, the, the servicer's

always gonna tell them, "Call

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us when the divorce is final."

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It seems like they don't even wanna

discuss w- your situation to help you

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navigate through it and see if you can

do it, because you need to know if you

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can do it or not when you're in it with

mediators or, or the, the attorneys

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and trying to figure out the path here.

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And if you, if they're not gonna

tell you what the path is or

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whether or not you can do this,

how, how do you finalize a divorce?

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Speaker: Right.

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Speaker 2: It, it's a chicken or the

egg, and it's, it's so frustrating that,

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um, that servicers don't, you know, give

some time to help them through this.

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And, um, so I end up trying to help

them through it, you know, to just help

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them get through the, the, the, "Yes,

I can," or, or, "I probably can't"-

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Speaker: Yeah

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… Speaker 2: you know, kind of thing.

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And so at least they can

get through their divorce.

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But yes, you're right.

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I mean, obviously you have to use

your, your post-decree income,

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your post-decree debts too.

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I mean, if I pull their credit, three of

the five debts might be g- being charged

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to their ex, so they're- Right … not

really gonna be their debts after.

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In the divorce decree, even though

they're still on the credit report,

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all five of those debts, I can ignore

the three that the credit r- that the

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divorce decree said aren't gonna be

theirs, that their ex-spouses have

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to, have to, spouse has to pay, right?

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So, um, knowing what the post-decree

situation looks like for debts

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and income is a big deal.

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But then it, it goes further than

that because the servicers on a name

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delete assumption can use whatever

debt-to-income ratio they choose.

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You know, Fannie and Freddie typically use

50% debt ratio as the, as the, the cap.

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Well, I've seen credit unions who use 36%.

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Speaker: Yeah.

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Speaker 2: So if you think you can

qualify for it and you're with some

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credit union that says they- they'll

allow them, and you stop there, and you

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didn't realize that you had to also figure

out your debt ratio, you could be in a

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pretty bad situation post-decree, right?

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So yeah, that's what you're

alluding to, and you probably…

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It sounds like you've heard

a couple of those scenarios-

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Speaker: Yes

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… Speaker 2: that come to life.

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Speaker: Right.

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Yeah.

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And- and I'm just thinking,

you know, I think so many

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people assume, "Oh, well, my…

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If- if I can do it and my attorney's

drafting the decree, it's done."

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But you gotta make sure you're talking

to your attorney about this because

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sometimes they don't even know.

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Speaker 2: Right.

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Right.

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Speaker: And then you're- you're set with

the divorce and you can't even follow

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through with what you've agreed upon

because- Yeah … you can't get the…

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I mean, that is…

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I don't mean to scare people.

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This isn't to scare.

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This is to just give you

the information to know-

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Yeah … what you need to look for.

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Speaker 2: Yeah.

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Speaker: So you need to- to call, and

you need to make sure when you call the-

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the person who, I don't, I don't know

all your fancy words, but the person

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who holds your mortgage, when you call

them, sometimes the person you talk to

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: 00:16:18

on the phone says, "No, you can't do

an assumption," and they don't know.

300

: 00:16:21

So you have to make sure that you're

talking to the assumptions department

301

: 00:16:26

or something so that you get the

right information on the front end.

302

: 00:16:30

Okay.

303

: 00:16:30

Then you can start digging in to see

if you can actually afford the home.

304

: 00:16:35

And Brett, like you were saying

before, in some situations,

305

: 00:16:40

renting is gonna be more expensive.

306

: 00:16:43

Speaker 2: Oh, absolutely.

307

: 00:16:44

Speaker: You know what I mean?

308

: 00:16:44

Even if you have to refinance.

309

: 00:16:46

Yeah.

310

: 00:16:46

And so there…

311

: 00:16:48

It is just, it's not something to

take lightly, and I think the thing

312

: 00:16:52

that's so hard is divorce is so hard.

313

: 00:16:56

Yeah.

314

: 00:16:56

And it's hard to work from the, you

know, your brain i- in the right spots

315

: 00:17:00

because you're under so much stress.

316

: 00:17:01

So just take a breath, have that hope, and

know, like, the more information that you

317

: 00:17:07

get, the more comfortable it makes you.

318

: 00:17:12

It really does, about anything.

319

: 00:17:14

So just to alert people that if you

have a home and you're not sure, dig in.

320

: 00:17:21

And then connect with Brett.

321

: 00:17:23

I always send people to Brett,

and you'll be in the show notes.

322

: 00:17:26

So- Um, yeah, so I think

that's so important.

323

: 00:17:32

Are there any other things that you see in

divorce for, uh, people, whether they are

324

: 00:17:41

wanting to keep the home or sell the home?

325

: 00:17:44

Any other big flags that are coming

your way that I maybe am not aware of?

326

: 00:17:48

Speaker 2: Well, there's…

327

: 00:17:50

I mean, the verbiage in the divorce decree

is a big deal for the mortgage piece.

328

: 00:17:54

Mm.

329

: 00:17:55

Um, or, or for even the, uh, the

name, deed, and assumption if

330

: 00:17:59

they, if they keep the house and

do a name, deed, and assumption.

331

: 00:18:02

Anybody who's dealing with the mortgage,

you're, you're going through an

332

: 00:18:05

underwriting process, whether you're

starting a new loan or whether you're

333

: 00:18:09

doing a name, deed, and assumption and

trying to keep their loan, you're still

334

: 00:18:12

going through an underwriting process.

335

: 00:18:13

So somebody's looking at that

divorce decree, and you better

336

: 00:18:17

believe that underwriters are

reading through that divorce decree.

337

: 00:18:20

So having the right verbiage in there,

which means h- having talked, h-

338

: 00:18:29

having talked to somebody about this

and, and kind of have your ducks in

339

: 00:18:32

a row before the divorce decree is

finalized is the critical piece, right?

340

: 00:18:37

Yeah.

341

: 00:18:38

Because i- if, like- Um, sometimes

you'll see, um, a client that'll after

342

: 00:18:49

divorce do a cash out refinance to,

uh, take out the marital settlement.

343

: 00:18:56

Well, that could have been structured as

a, as a buyout instead of a cash out, and

344

: 00:19:00

cash out is a hit to the interest rate.

345

: 00:19:03

So, and I think that's- Wow … one

of the big mistakes that most

346

: 00:19:06

non-divorce mortgage specialists

make, is they just don't deal with

347

: 00:19:09

this enough to know that, that, that

that can be structured as a buyout.

348

: 00:19:14

And, and there's a, there's dif-

m- many times I find myself helping

349

: 00:19:17

people structure it as a buyout

before the divorce is finalized.

350

: 00:19:22

That, you know, we went to…

351

: 00:19:25

The client and I kind of had

this conversation, and we went to

352

: 00:19:29

the attorney and said, "This is

how we want this to be written."

353

: 00:19:33

Sometimes it's you pay the ex-spouse

more of a marital settlement to

354

: 00:19:37

have them take more of the debt.

355

: 00:19:39

So it, it doesn't really matter

to them, it's still, it's,

356

: 00:19:42

it's a net zero sum, right?

357

: 00:19:44

Speaker: Yeah.

358

: 00:19:45

Speaker 2: But, but it allows them to do

it as a buyout, not a cash out, saving

359

: 00:19:50

them s- potentially three quarters

of an, a percent on the interest

360

: 00:19:54

rate, which is a lot these days.

361

: 00:19:57

Speaker: Yeah.

362

: 00:19:57

So- And, and I'm so glad that you

brought that up, because that's another

363

: 00:20:00

thing as I'm thinking back, as I've

worked on these, and if I'm helping

364

: 00:20:05

someone through their paperwork, I know

I've talked to you and the lender and

365

: 00:20:11

asked what wordage needs to be in here.

366

: 00:20:14

Speaker 2: Yeah.

367

: 00:20:14

Speaker: Not every attorney's doing that.

368

: 00:20:16

So I feel like this is…

369

: 00:20:18

I mean, I don't think

they all are doing that.

370

: 00:20:20

I, I don't think- No … that

they're realizing that they need to.

371

: 00:20:24

So this, there's probably not a lot of

attorneys listening to this podcast, so

372

: 00:20:30

it's gonna be up to you as the, the client

to let your mediator or your attorney

373

: 00:20:36

know that this is really important and

that they need to get that wording right.

374

: 00:20:41

Because, you know, you kind of

got to become the expert in the…

375

: 00:20:45

Just like in your health stuff, you have

to kind of become the expert in yourself.

376

: 00:20:49

Speaker 2: Yeah.

377

: 00:20:50

And, and there's, you know,

there's a lot of pro se people

378

: 00:20:53

that don't even use attorneys.

379

: 00:20:54

I know.

380

: 00:20:54

And I always tell them, th- they typically

will use the Minnesota form, this is

381

: 00:21:01

the form on the Minnesota State website

for their divorce decree, and that…

382

: 00:21:05

It covers a lot of stuff and it, and it,

it's fairly robust, but it's, it, there's

383

: 00:21:09

a lot of things that it doesn't do well.

384

: 00:21:11

It doesn't convey, um,

convey property very well.

385

: 00:21:15

It, the…

386

: 00:21:16

We see post-decree issues with that form.

387

: 00:21:19

So I tend to tell people, if you can-

If you, it's probably worth $1,000

388

: 00:21:25

or whatever it would be to have a,

a, an attorney just draft your decree

389

: 00:21:32

and put it in their template, right?

390

: 00:21:35

They have a, they all have a template,

and it, it's all- Yeah … basically the

391

: 00:21:38

same legal template that they all have,

but that's different and more robust

392

: 00:21:42

than the, than the Minnesota state form.

393

: 00:21:45

And, um, it just, it, it

addresses a lot of things that

394

: 00:21:49

the Minnesota state form doesn't.

395

: 00:21:51

So that's one thing I

would say to pro se people.

396

: 00:21:54

But, um-

397

: 00:21:55

Speaker: You know, and I've gotta jump

in, Brett, 'cause I haven't talked about

398

: 00:21:58

this forever, but I have a Minnesota

divorce course, divorce paperwork course.

399

: 00:22:05

You can go in, and I have

videos, and it, you know, it

400

: 00:22:09

makes me cringe to watch myself.

401

: 00:22:11

I did it a while ago.

402

: 00:22:12

But I teach as I go.

403

: 00:22:14

Like, I teach the legal information,

and they have the forms.

404

: 00:22:19

And they have the forms that I would use.

405

: 00:22:22

I think your name's in there, too-

406

: 00:22:24

Speaker 2: Oh,

407

: 00:22:24

Speaker: good … when

you're looking at…

408

: 00:22:25

So it's like if you can't afford

me even, you know, there's…

409

: 00:22:29

And sometimes you can't.

410

: 00:22:30

Sometimes you can't, and yet you

want a little bit more than…

411

: 00:22:34

'Cause a lot of people come to me

'cause they're like, "I just can't even.

412

: 00:22:37

I don't know how to fill this out."

413

: 00:22:39

Speaker 2: Yeah.

414

: 00:22:39

Speaker: So they, it walks them through

and gives information, and it still

415

: 00:22:44

always says, you know, you might just

take this to an attorney to represent

416

: 00:22:49

one of you on a limited scope if

you're in Minnesota, and then just let

417

: 00:22:53

them file it for you so that you're-

Yeah … getting everything taken care of.

418

: 00:22:58

But that is another option for people.

419

: 00:23:00

And I know it's different for everyone,

and I'm kind of a do-it-yourselfer.

420

: 00:23:04

I'm kind of a, you know, I'll

figure it out, and so I get why

421

: 00:23:08

people do it, but there are-

Yeah … things you don't think of.

422

: 00:23:11

There's so many things with the

home, with, like, your estate

423

: 00:23:14

plan, with your beneficiaries.

424

: 00:23:16

There's just so much.

425

: 00:23:17

It is nice to have some guidance.

426

: 00:23:20

Speaker 2: Yeah.

427

: 00:23:21

Speaker: So and

428

: 00:23:21

Speaker 2: you're- And you're, I mean,

it's funny the, uh, the, one of the

429

: 00:23:25

examples I give to how different each

scenario is, sometimes, you know,

430

: 00:23:33

sometimes leaving both names on the

loan is a mistake Sometimes not leaving

431

: 00:23:42

both names on the loan is a mistake.

432

: 00:23:45

Speaker: Yeah.

433

: 00:23:46

Speaker 2: Right there, you know, it

just depends, you know, if, if somebody's

434

: 00:23:51

got a kid that's graduating, I just, I

just had one yesterday that, that has

435

: 00:23:55

a, a child graduating high school in two

years, and it's kind of that, well, we're

436

: 00:24:00

gonna stay in this house for two more

years, but then I'm gonna sell the house.

437

: 00:24:05

And in that case, it makes sense

to have two names left on the loan.

438

: 00:24:10

Mm-hmm.

439

: 00:24:10

But it depends on how much trust there

is in that relationship, you know,

440

: 00:24:15

in that, in, in, between the spouses.

441

: 00:24:17

And a high spite divorce

is usually a better idea to

442

: 00:24:20

take the name off, you know?

443

: 00:24:22

Speaker: Right.

444

: 00:24:22

And,

445

: 00:24:23

Speaker 2: and

446

: 00:24:23

Speaker: I would-

447

: 00:24:24

Speaker 2: Than leave

it on for most people

448

: 00:24:24

Speaker: yes.

449

: 00:24:25

I would say, Brett, that most

attorneys don't advise that.

450

: 00:24:29

Right.

451

: 00:24:29

But I have had people who have

walked through the mediation

452

: 00:24:32

process who have done that.

453

: 00:24:35

Speaker 2: Yeah.

454

: 00:24:35

Speaker: Because they're, you know…

455

: 00:24:36

I'm like, "You can, you

can own the home together."

456

: 00:24:38

And they're like, "We can?"

457

: 00:24:39

I- I- yeah, you can own

a business together.

458

: 00:24:43

You can, you know, you don't have to

be married to own things together.

459

: 00:24:46

But it is a little tricky because

you have to then talk about how

460

: 00:24:51

is it gonna divide when it sells.

461

: 00:24:53

And, and people, I'm assuming,

Brett, usually just, like, so when

462

: 00:24:57

that child graduates, they sell the

home and split the proceeds, right?

463

: 00:25:03

Speaker 2: Right.

464

: 00:25:04

Right.

465

: 00:25:04

Speaker: But then there's all kinds of

things of, what if they don't agree?

466

: 00:25:07

Like, we get into that when we're talking.

467

: 00:25:08

Yeah.

468

: 00:25:08

What if they don't agree on what

the price to sell it is and…

469

: 00:25:11

Y-

470

: 00:25:11

Speaker 2: you said something that

I, I think is a important point

471

: 00:25:14

to, to come back to real quick.

472

: 00:25:17

You said the ownership, and there's

a difference between the ownership of

473

: 00:25:21

the property and who's on the loan.

474

: 00:25:24

Who's on the loan-

475

: 00:25:25

Speaker: Okay, talk about that

476

: 00:25:26

Speaker 2: What's that?

477

: 00:25:26

Speaker: Talk about that a little bit.

478

: 00:25:28

Speaker 2: Yeah, yeah, yeah.

479

: 00:25:29

Um, it's probably, if not one of

the most, the most misunderstood or

480

: 00:25:36

confusing, I think, parts of uncoupling

the house, is the fact that there's

481

: 00:25:42

these two completely segregated things.

482

: 00:25:45

Who owns the house, which is

who's on the title or the deed-

483

: 00:25:49

Speaker: Mm-hmm

484

: 00:25:51

Speaker 2: And then who's

responsible to repay the bank?

485

: 00:25:55

Who's on the loan?

486

: 00:25:57

Those are totally different things.

487

: 00:25:59

And in Minnesota, you

can have either, right?

488

: 00:26:02

So y- you know, you can have, you can

have one spouse on the loan and both

489

: 00:26:10

spouses on title, both are ownership

of it, but only one spouse signs

490

: 00:26:14

up or, or is responsible to repay.

491

: 00:26:17

So it's easy to change

the title after a divorce.

492

: 00:26:20

You just do a quitclaim deed, Q-U-I-T-

Yep … and that's a couple pages, and

493

: 00:26:26

you file it with the county for 120 bucks

or whatever it is, and, and it's changed.

494

: 00:26:32

You give 50% title rights from the other

spouse to, to the other spouse, so now one

495

: 00:26:38

spouse has 100% ownership of the property.

496

: 00:26:41

That was easy.

497

: 00:26:42

Speaker: Yep.

498

: 00:26:42

Speaker 2: It's hard to take

a name off the mortgage.

499

: 00:26:46

Well, the, the loan, I should

use the proper terminology.

500

: 00:26:50

It is really a loan.

501

: 00:26:52

Um, we, we misuse the word mortgage, but

I won't get into that- Okay … 'cause

502

: 00:26:55

that's too deep for everyone.

503

: 00:26:57

So, um, I, even I use the word mortgage

interchangeably, which, um- Okay … but,

504

: 00:27:03

so when two people are on a loan, it's

harder to remove one name because then

505

: 00:27:08

you have to go through a refinance process

or a name delete assumption process.

506

: 00:27:12

You have to go through underwriting

to make sure the person, that that

507

: 00:27:16

one person remaining qualifies

to make those monthly payments.

508

: 00:27:21

So-

509

: 00:27:22

Speaker: Right.

510

: 00:27:22

Yeah … sure.

511

: 00:27:23

I'm glad that you brought that up

because I've never really s- really

512

: 00:27:26

sat down and thought about that.

513

: 00:27:27

So if your name is on the title

alone, so say you're the, the mom,

514

: 00:27:32

and you're gonna keep the home- Mm-hmm

515

: 00:27:35

and you're gonna keep it for

two more years, 'cause you got

516

: 00:27:37

a kiddo that's graduating then.

517

: 00:27:40

And so you, during the divorce

decree, you do that quitclaim deed,

518

: 00:27:45

and your name alone is on the title,

but you're both still on the loan.

519

: 00:27:50

Speaker 2: Mm-hmm.

520

: 00:27:51

Speaker: How does that affect

you as the owner of the home?

521

: 00:27:56

Speaker 2: Um, well it's, it's probably

wiser to remove the ex- ex's name.

522

: 00:28:05

Um, but it, it doesn't…

523

: 00:28:10

You're still the owner and, you know,

you- it just means that you're, you're

524

: 00:28:16

both responsible to repay the loan-

525

: 00:28:18

Speaker: Mm-hmm

526

: 00:28:19

… Speaker 2: but I'm the

only one that owns it.

527

: 00:28:21

It's just two different things.

528

: 00:28:23

Um-

529

: 00:28:26

Yeah

530

: 00:28:26

Speaker: And so I guess in the

paperwork we talk about who's gonna

531

: 00:28:29

pay for taxes, who's- Mm-hmm … gonna

pay for repairs that come up.

532

: 00:28:33

You know, you do have to

address all of those things.

533

: 00:28:37

Speaker 2: Yeah, but they're both on the-

534

: 00:28:37

Speaker: That's all in the paperwork.

535

: 00:28:39

Right.

536

: 00:28:39

What if there's nothing in the

paperwork and you're on the title,

537

: 00:28:42

but you're both on the loan?

538

: 00:28:45

Then what?

539

: 00:28:46

Speaker 2: What if

there's n- Say that again.

540

: 00:28:46

Like, what if someone

541

: 00:28:47

Speaker: dra- I, this is, I

don't even know if this has

542

: 00:28:50

ever happened, but say- Yeah

543

: 00:28:51

you did a do it yourself divorce.

544

: 00:28:53

Yeah.

545

: 00:28:54

You did it yourself.

546

: 00:28:55

Yeah.

547

: 00:28:55

And then you did a quick claim deed and

Mom's on, owns the home by herself, but

548

: 00:29:01

you're both on the loan And you never

talked about who's gonna take care of

549

: 00:29:06

repairs, and you're not agreeing to it.

550

: 00:29:09

Is that on the owner?

551

: 00:29:11

Or, you know what I mean?

552

: 00:29:12

Like, if something happens that

you have to, like a furnace

553

: 00:29:15

goes out, or I don't know.

554

: 00:29:17

You never- Well, now you're,

555

: 00:29:18

Speaker 2: now you're getting into

legal questions that I, that are

556

: 00:29:22

beyond my scope because what I- So just

557

: 00:29:25

Speaker: make sure you

put it in the paperwork.

558

: 00:29:27

Speaker 2: Yeah, yeah.

559

: 00:29:29

I mean- But see, that's the

thing about divorce decrees.

560

: 00:29:32

It, it's just…

561

: 00:29:35

I don't know if I should even say this,

but there's no teeth in a divorce decree.

562

: 00:29:40

There's no, um…

563

: 00:29:42

I mean, it says what people are going

to do, what both spouses are going

564

: 00:29:47

to do and, and, and, um, but if, if

that's, if whatever that is isn't

565

: 00:29:52

done, you have to file a motion and

bring it back to court and have- I know

566

: 00:29:56

the judge say, well, that, you know,

th- this is what you had in the decree.

567

: 00:29:59

You agreed to this, so

I'm gonna rule this way.

568

: 00:30:02

The decree just gives…

569

: 00:30:05

And this is l- this is me talk-

completely speaking out of turn

570

: 00:30:09

because I'm not an attorney, if any

attorneys are listening to this.

571

: 00:30:13

But, you know, you, you, the, the

decree, if, if you don't do something

572

: 00:30:17

that, that the decree says, the

police are not coming to your house.

573

: 00:30:22

Speaker: But you do have, if at least

you take the time to write up how it's…

574

: 00:30:27

Like, you do need to just…

575

: 00:30:29

That's why I think it's so important

to have someone help you, you know,

576

: 00:30:32

think through, okay, now what about

if you need to repair something?

577

: 00:30:36

What about…

578

: 00:30:36

You wanna make sure you're

thinking through all of that

579

: 00:30:39

so that you get it- Oh, I

580

: 00:30:40

Speaker 2: see what you mean.

581

: 00:30:41

Speaker: You know what I mean?

582

: 00:30:41

Yeah.

583

: 00:30:42

You get it in the decree, and

yet, but you can go to court.

584

: 00:30:46

You do have that because

it's in the decree.

585

: 00:30:48

Where if there was nothing

there, it's a little tougher.

586

: 00:30:52

Speaker 2: Yeah.

587

: 00:30:53

If there's two, if, if, if the

exiting spouse left their name

588

: 00:30:56

on the loan, this is why it's

better to just remove the name.

589

: 00:31:00

This is one of the many reasons why.

590

: 00:31:03

Um, n- not o- not only can a, a missed

payment affect the person who left,

591

: 00:31:09

whose name is still on the loan and

still therefore responsible to repay.

592

: 00:31:12

If the r- if the retaining spouse

misses a monthly payment, the other

593

: 00:31:17

spouse's credit is affected negatively.

594

: 00:31:19

Right.

595

: 00:31:19

So that, that's an, that's an easy one.

596

: 00:31:21

That, that, until the name's taken off,

you're both still re- r- um, responsible

597

: 00:31:26

to repay the loan, even if the divorce

decree says- I know … that that exiting

598

: 00:31:30

person is indemnified and held harmless.

599

: 00:31:33

But what happens, the, another reason

why it's best to take the name off is

600

: 00:31:37

because, kind of what you're saying-

People get hung up on that and if, if,

601

: 00:31:42

you know, it's kinda like, "Oh, I was

really nice to you and I left my name

602

: 00:31:46

on there so you could keep your 3.25

603

: 00:31:49

interest rate."

604

: 00:31:49

So what happens, what I've seen in the

last four years is that people, the, well,

605

: 00:31:56

the exiting spouse will use that against

them in almost every conversation, right?

606

: 00:32:02

Uh, they, like they

owe them kind of thing.

607

: 00:32:04

Speaker: Mm-hmm.

608

: 00:32:05

Speaker 2: So, you know, it just depends

on the relationship, the trust level,

609

: 00:32:08

the- Yeah … the, the, um, the ability of

the people to get along or not get along.

610

: 00:32:14

But that, that is…

611

: 00:32:15

And you know, it's a…

612

: 00:32:16

S- I could absolutely see

kinda what you're saying,

613

: 00:32:20

"I left my name on the loan.

614

: 00:32:22

I know I'm not on the title of the

house, but I left my name on the loan, so

615

: 00:32:26

therefore I have some kind of jurisdiction

or say in what happens with the house-

616

: 00:32:32

Yeah … because I'm responsible to pay

this debt," which is absolutely false.

617

: 00:32:36

They don't.

618

: 00:32:37

They don't have- Mm-hmm … any

jurisdiction, any say in it.

619

: 00:32:39

But they think they do, and they can

probably easily convince their ex-spouse

620

: 00:32:43

that they do because, uh, who, who's

supposed to know that, you know?

621

: 00:32:48

Speaker: Right.

622

: 00:32:49

Speaker 2: So- Right … it's just,

it gets mucky and it doesn't- It's

623

: 00:32:52

Speaker: so mucky, and this is what

I wanna say because our time is up.

624

: 00:32:55

We actually went over a little, but

I'm so- Okay … thankful that you

625

: 00:32:59

were willing to come in and talk.

626

: 00:33:01

Um, I think I'm going to just draft

up a little cheat sheet on this, and

627

: 00:33:08

I'll let you look at it, Brett, and

I'm gonna put it in the show notes-

628

: 00:33:11

Okay … so that people can have something

handy, because we went over a lot,

629

: 00:33:16

and I don't want people to be fearful.

630

: 00:33:18

So if we can just get something

written down, um, and maybe

631

: 00:33:21

you already have something.

632

: 00:33:23

Like

633

: 00:33:23

Speaker 2: what- So I have what…

634

: 00:33:24

I have a, a few years ago, I, I drafted

a handbook, um, that he- it, it's an,

635

: 00:33:29

a handbook for navigating high rates.

636

: 00:33:31

So it goes through the different

options that people have when they

637

: 00:33:35

have a 3% rate and rates are in

the sixes, what are their options?

638

: 00:33:40

And it goes through quite a lot

of that, uh, and I'll send that

639

: 00:33:43

to you and you can post it.

640

: 00:33:43

Speaker: Perfect.

641

: 00:33:43

And I feel like you maybe have sent

that to me before, but send it again.

642

: 00:33:47

We'll get that in the show notes

so this is all crystal clear.

643

: 00:33:50

And then if it's not,

they can give you a call-

644

: 00:33:53

Speaker 2: Yeah

645

: 00:33:53

… Speaker: if they have questions.

646

: 00:33:54

Perfect.

647

: 00:33:55

All right.

648

: 00:33:55

Brett, thank you- Well,

great … so much for being here.

649

: 00:33:57

Speaker 2: You're very welcome.

650

: 00:33:58

Thanks for

651

: 00:33:59

Speaker: having

652

: 00:33:59

Speaker 2: me.

653

: 00:33:59

Speaker: Thank you for being here.

654

: 00:34:00

Speaker 2: Yep.

655

: 00:34:01

See you, Lisa.

656

: 00:34:01

Speaker: See ya.