Noel Cookman | The Secrets to Divorce Lending Every Family Lawyer Needs To Know

We’re excited to welcome Noel Cookman as our guest today on the “Texas Family Law Insiders” podcast. Noel is a Divorce-Lending Specialist and is the Founder & President of The Mortgage Institute. 

Noel sits down with us to talk about his process for working with attorneys and their clients at the intersection of divorce and mortgage finance. He also offers CLE-Accredited courses for family law attorneys. He reveals so many of his secrets, you really need to listen as he tells us about:

  • His secrets to helping a stay at home parent keep the house
  • Excludable debt in mortgages
  • Different calculations to determine the buyout amount of the house
  • His advice for family lawyers
  • And more

Mentioned in this episode:


Noel Cookman: Just because it’s not off of the credit report for the other person, you know, doesn’t mean that that has to count against that other person. There’s such a thing in mortgages as excludable debt.

Voiceover: You’re listening to the Texas Family Law Insiders podcast. Your source for the latest news and trends in family law in the state of Texas. Now, here’s your host, Attorney Holly Draper.

Holly Draper: We’re excited today to welcome Noel Cookman to the Texas Family Law Insiders podcast. After spending 25 years working in the church, Noel started his own business helping people take care of their home financing. Noel has been a divorce lending specialist since 2002, and works exclusively with people going through divorce. Thank you so much for joining us today.

Noel: It’s my privilege and honor. And I want to say that I appreciate the work that you do. And many, many family law attorneys in Texas that I’ve had the pleasure of meeting, you guys are part and parcel of holding the community together. A lot of people don’t know how to appreciate what the work that you guys do. But I’ve seen it and I appreciate what you do.

Holly: Thank you. So why don’t you start by telling us a little bit about yourself?

Noel: Well, you know, I’m kind of old. So that could take a while. You didn’t ask about my history just about me. So I’m a bit of an adventurist. Which is you wouldn’t, you couldn’t tell that for most of my life, which is spent behind a laptop and 18 hour days and seven day weeks. So I work pretty hard. But I have a lot of energy and a lot of drive to see so much that can be done. So I’m really excited to be at this age in life and have the kind of energy that I do. But I’ve enjoyed, you know, a lot of different adventures.

I don’t know what people think of when they say when they hear the word church work. But for me, it was I did everything from work with kids, you know, which, which meant dressing up in a gorilla costume and standing on top of the church building to wave wave people down just you know, to entertain the kids and have a big time. So I was able to travel overseas a little bit. And do you know everything from handing out Bibles to showing the Jesus film in the bush country of Africa, in southern Africa and, and on one occasion, I took my dear wife who by the way, I’ve tricked into staying with me for over 49 years now. And and she she said after that trip no more because we slept in tents and sleeping bags and out in the open and so forth for three weeks traipsing around the bush country of Mozambique.

But I’ve been in a few civil wars. I didn’t know and I was invited to go for the mission trips, the country was in civil war are quite quite bright the way it was. But anyway, I enjoyed going places I don’t I don’t do go places to sightsee or anything I like to be on a mission of sorts, if I’m going somewhere, but I do enjoy seeing that. And so I’ve got two wonderful sons. One of them works with me, Andy is the head of the divorce lending transaction. He’s a transaction coordinator. And so he worked full time with me and my other son works with me also contractually, and, you know, almost everything he can do, he does on the internet. I just got I feel like, all that time in working in the church world.

I’m from kind of like an evangelical, Pentecostal charismatic background. So we had, as I look back on is interesting, because all kinds of people, you know, all economic, social stratas, you know, and, and maybe not the Uber rich, but so I learned how to relate to a lot of different kinds of people, different stations in life, different economics, young people, children, old people, adults, moms, dads. And so I think it was all a preparation for what I’ve been doing for the last almost 20 years now. And that is working with folks going through a divorce, using the mortgage financing, to help them and walk with them through that and get something straight now for them.

Holly: So what exactly is a divorce lending specialist and how did you decide to become one?

Noel: Well, it was kind of an aha moment, you know, kind of like a idea that dropped out of the sky. I had, I was new in mortgage and the mortgage industry. And you know, I’m not a great salesman, so, but whatever I do, I want to succeed at like most people, I guess. And so two years into it into the mortgage industry with my brother in law. Pretty still pretty green. I think this was before the financial crisis of 2008. And when you were in the elementary school, but I was learning what I could about the mortgage industry but and we were spending a lot of energy we didn’t we didn’t really have a base of customers or how to get customers. So we advertise and spend a lot of money advertising and it was okay.

We did, we did okay. But what happened was, I determined that I wasn’t going to take another box of doughnuts to realtors and beg for a chance to get them to refer clients to me. I said, I live under a bridge and a cardboard box before I do that again, because it just wasn’t working out. But then it’s kind of dropped out of the sky. fact, I can take you to the place on the track where I was jogging at Grapevine Community Center, where the idea hit me and it was like one of those what if, what if we could do this and I had seen transactions where people’s credit was badly messed up. And I was like, what, what is this foreclosure here?

Well, that was the blankety blank x, she got the house and was, you know, she never refinanced it. And the judge told me, I didn’t have to pay the mortgage, and bah, bah, bah. And so several things like that had happened. And again, I’m not I’m not a great salesman, I’m not a great marketer. But I did have an eye for a need. And it just hit me, I mean, literally dropped out of the sky. What if I could insert myself into that situation where people are going through a divorce before they get the thing hopeless, settled, and, and I can qualify them for the refinance that needs to happen. I was learning about buyouts and the old tea lane at that time, barely knew about it, but someone just saw a huge deed I before I even knew that there were like, 75,000 75,000 divorces a year in Texas, or before I knew what the metrics on it were, I thought, wow, we can help some people if we just.

So idea came to me, I know, I’ll go knock on lawyer’s doors and say, hey, listen, let me in. And of course, the last thing they teach you lawyers in law school is how to keep people like me out of your office, unless they’re writing a check. So, so, right. To be to be quite candid with you. The Family Law legal community in Texas has been super, super gracious from day one. I mean, there’s always people like, you know, who you What are you doing? But I’ve been to other states. And trust me, the lawyers here in Texas. I love them. I mean, they were they from day one. They were very open and gracious to me and said, sure, I can see. And you know what, what I like about you, you lawyers like you, you’re asking questions, and you’re educating yourself and educating others. When I explained what I do, they go, my clients could benefit from that. That’s how you tell a good lawyer.

My clients can benefit from that. And so I just, I didn’t have anything to compare it to, until I went to some other states and found out that the legal community there is not as gracious as Texas is. But anyway, moving on. That’s what happened and how the idea came to me. And so I began to, to take on cases which loan files for us cases for you guys, where I felt an obligation. I’ve got to promise this lawyer that I’m going to get their client money into refile because you know what it’s like, they’re going to refi the house, and they’re gonna pay this or whatever. So anyway, that’s how I got started.

Holly: So I know you work with Family Lawyers a lot. Can you tell us generally what types of services you provide for Family Lawyers?

Noel: Basically, it’s education and consultation. And what I’ve done is I started with, well, actually, it took a few years before I was able to get CLE credit for the presentations that I made. But in about 2006, I started writing CLE courses, and specifically for the intersection of divorce and mortgage finance. The questions that lawyers would have about mortgage finance, the big title would be everything a divorce lawyer needs to know about mortgages that are afraid to ask, but so I’ve worked out this is an awesome business model. One day, I’m gonna make a bunch of money by selling a book like this, but it’s an awesome business model. It’s a zero cost enterprise to the end user, to your clients.

And to the lawyers. Nobody writes me checks. Like the clients don’t write me checks, lawyers don’t write me checks. If anything, I write them checks. So I worked out a way to make my livelihood by giving out free information and not charging for it. So education is number one. I really want to do that even more. And I’ve you know, 14, 15 years now I’ve been doing CLEs and I did a bunch last year, but I’m an accredited sponsor with the Texas bar now. So I really want to do more. So education and the consultation often in real time. In other words, call me from mediation as what I tell people, I’d prefer, they call me before I know that you want to get into what we can do beforehand.

But we do real time consultation, either from a client attorney meeting, or a mediation. And I’ll give general input. Obviously, if I haven’t taken an application, I have to give general guidelines for mediation, put this in the MSA. Don’t put this in it and that’ll give us flexibility. And I have a few little strategies that I that I offer for mediations that give flexibility to me as a lender. So basically, taking care of their clients so that they can not be always thinking, I wonder, you know, Susie, said she could get the financing. And they said that this bank has approved them. But I’ve seen and heard that before. But I What am I really to believe so giving peace of mind to the lawyer, that I’ve got it covered and approval statement with an precise strategy, how to get there.

And so I pre underwrite the decree, and I’m not a paralegal or a lawyer, and I don’t presume to do a legal review. So if I tell you, okay, I’m going to review the ticker. Let me review the decree before you enter the thing. I’m not saying unlike your backup, legal review, it’s really pre underwrite. Because every page every word on a decree is underwritten by by an underwriter and alone. So we pre underwrite it, make sure that that’s not the first time that we’re finding out the underwriter goes, oh, did you see this debt on page? 48? You know, and that’s not you know, so, you know, pre underwriting the decree and and just taking care of taking that load off the mind of the attorney.

Holly: So you mentioned a little bit ago that we want to talk about, what can we do you know, early on. So at what point in the divorce process would you recommend attorneys have their clients contact you?

Noel: Just right out of the chute, and this would be virtually 100%. And then in the slim part, that would not be making 100%? I would say, That’s right. Let me take the call anyway, I would say sooner than later. There is no, this is too soon. This was too early. In my world, it doesn’t matter. If somehow somebody knew they were going to be divorcing in two years. That a crystal ball, I’d want to talk to him today. Because there are so much that can be done in advance to prepare for now I’m thinking the mortgage finance, you can probably think of a million other things that you can advise, you know, somebody on that had to do with not just the legal part, but they just all sorts of things.

I’m talking about, how can I make sure that this person gets good favorable mortgage financing? They can do that by out they can get the house? They can we can turn in a an approval letter to the lawyer that says okay, sure. So the other side, they can do it, they’re approved. They’re not just pre approved, it’s underwritten. So I would say that in almost 20 years of doing this, I’ve never had a case where I thought I hung up the phone like man, they called too early. I wish they wouldn’t bother me until later on. Like, no, this is totally by the way, this is counterintuitive to the mortgage industry. It just is not happened. I like I always thank thank you for calling just early.

So just if you’re looking for the shortest answer, sooner, the better. So from the very beginning. And here’s here’s another thing, if I’m talking to you as a lawyer, okay? Don’t try to figure out whether or not they need me. If you can get them to call me. I’ll figure out all of that. I don’t want you trying to go well, I wonder if it’s time to call Noel. I wonder if it’s too busy. don’t want to bother Noel, don’t want to, you know, bother him. You lawyers are very considerate of people’s time. You go I don’t want to bother you, but and I’m like, quit that. Stop it. B other me. I’m here so you can bother me.

Okay, I don’t have I don’t have business. So I didn’t bother me. It’s not a bother. The only thing that bothers me is when we tell a customer, okay? Get us this at the other end, they just slack off because they’re like, oh, like, we took a call yesterday. We called it six months ago, I said you better apply now. Like now I’ll get my divorce final first. I’m like, big mistake, but have it your way? Well guess what he called yesterday. My divorce has been final for a month and I can’t get my financing. So can you guys help me? So he I mean, it’s gonna be very expensive for him if it’s even possible. So no, there’s no time that’s too early for us.

Holly: A lot of times we have clients who, at the beginning of the case, either don’t think they’re going to want the house or they don’t think it’s going to be an option to have the house. Do you prefer that we wait until they really think they want the house and they want to find a way to do it. Or do you prefer if there’s a house and there’s even a remote possibility they’re interested in keeping it they should be calling you right out of the gate.

Noel: Call immediately don’t don’t even figure that part out. As a matter of fact, we work a lot of cases where we’ve worked with the people who are not sure. And they’ll tell us up front, they’re not sure. But even if they think they’re sure, and they change their mind later on, if they’re if they decide, well, I’m not going to keep the house, I’m just going to, we’re going to sell it, or he’s going to get it or she’s going to get it and are going to buy a house, it’s the same application, we, we punch a few buttons, and boom, we now we we’ve kind of already done the work to prequalify them to buy a house to say if they switch, or the other way around doesn’t matter.

We’ve done a huge amount of work to make sure their credit qualified, income is established in a way that’s documentable, and it counts towards qualifying income. So I would say the parenthetical thing on this is, I don’t try to tell people what the settlement should be. I’d stay away from shoulda, you oughta, he oughta pay this, he oughta to get this you ought to pay, we don’t do that. That’s you and the client. We’ve we are constantly seeking what’s on the table, what are you trying to accomplish? Now I’ll get you there. And I’ll tell you how long it’s going to take to get there.

But we don’t, we don’t jump in to say you ought to sell or you ought to buy you ought to do whatever. We just say, what do you want to do? And then now obviously, we have to define limits, you know, financing limits to them, you know, you can’t qualify for an unlimited number. But you know, trying to figure that out? No, don’t don’t worry about it. If unless everybody’s got a bunch of money in the bank, and they don’t have to get financing for their house. Call me because one way or the other, they’re gonna need money, you know, to buy or refinance a house. Does that make sense?

Holly: Yes. So a lot of our cases will involve the stay at home parents who may really love that house and really want to be in there. Is there any hope when we have a case with a stay at home parent?

Noel: Actually, way more often than people think. Way more often, because, and I know you can’t stereotype, but classic divorce or classic situation, but a lot of times a stay at home mom is gonna get either child support, and maybe some form of spousal support, because that’s just the general situation when you have someone who a lot of times they were professionals or teachers or something, you know, 20 years ago, and, but they became a wife and mother, right? And usually it’s not quite 20 years. But you know, you know, the drill. Way more often than people think they can qualify for a mortgage, what you have to do in that case, is begin to design that qualifying income, not just because you’re getting spousal support doesn’t mean that’s qualifying income, it has to be desired.

There’s only two main metrics, I’ll go ahead and give you a little bit of the magic right here. You got to document that you’ve received it for six months, and it has to continue for three years. So you can do a lot. And this is the way my mind works for good or ill. This is how I do this kind of thinking at three in the morning, you know, trying to figure out deals. Now. Some of this is just like we can do it in our sleep. You know, the saying, well, we’ll give her 3000 a month for two years. And that ought to be enough to make the bank happy. Well, no, it doesn’t last long enough. And going back to calling earlier sooner than later, you can set up oh my gosh, I’m giving my secrets away. Hope no mortgage people are watching this. But here’s here’s a super amazing secret.

See in that situation, the stay at home mom, guess what, she’s not paying the house payment, the car payment, the groceries, utilities. Husband is alright. But they call they go because one of the first things they learned is how much support they’re going to get. Because it’s kind of codified, right? I mean, you got to know the minimum least. And they’re talking about spousal support. Okay, I want to know that do because I want to find out what they’re talking about. Again, I don’t change it. I might say, don’t do 3000 for two years, do 2000 for three years or something that makes the same number of dollars go out. But it’s now structured in a way that is qualifying.

So we’ll say okay, he’s paying, okay, let’s say you’re, you’re you’re going to get 2500 in child support, forget spousal support right now. That would be the same concept, let’s say 2500. And that’s what she needed to qualify. We’d say if he’s paying the house payment, that’s $1500. He’s paying the Mercedes payment, that’s $500 he’s paying groceries, that’s $500. $2500 worth of expenses. Now, he’s gonna write you a check for $2500 every month, put on it support, and you’re gonna make the house payment, you’re gonna make the Mercedes payment, you’re gonna pay that. So so without that payer, actually partying with another dime.

Now, I’m not talking about if they’re ordered, you know, in advance to pay and they are paying anyway, that’s great, but I’m talking about where they’re not even. It hasn’t even been ordered, temporary support or anything yet. So the payer is actually not paying any extra money, but creating a paper trail of six months, and see the sooner we get started. That’s one of the reasons I say, call me sooner than later, I’ll show them how to get started.

Holly: So, so those temporary support payments could be made while they’re still married during a divorce. And that would count as income to the stay at home spouse.

Noel: Yes, there’s only one little sliver of a difference. And it doesn’t matter that much. It’s Freddie Mac, you hear about Fannie and Freddie, Freddie Mac has this little thing that has to be ordered before to be qualifying. But for FHA, VA, Fannie, which is the bigger the two giants there. It’s just like, and I word, it goes, document that support has been received. It doesn’t say show a court order. Now, the court order or their agreement, final decree has to define by the age of the children and emancipation and everything, and you can do the math. All the math is right there in a decree, you know, if it’s gonna, when it’s going to stop. So we’re doing that math behind the scenes.

One of the first questions how are you children? How is your oldest? So when are they going to turn 15? Are they in the ninth grade? Getting ready? You know, whatever, because we’re looking for that three year. See, that’s us doing the math for a year. And then sometimes every once in a while, say, getting divorced in July, a kid just got out of ninth grade? Could you extend that emancipation date to August or whatever? You know, just I’ve had that happen a couple of times, and dad’s like, okay, whatever, you know, is helpful to qualify.

So, yes. Big yes. I love those cases, those moms, you know, they stay at home and they’re not out, you know, and a lot of them are going back to work at some point. And because we want to, we want to advise everybody and say, okay, well, the support isn’t enough, necessarily. But you know, you’re going back to work, okay, you’re finishing up your teacher certificate, you’re going to okay, what is that income going to be?

And we’re creating this whole thing, we’re reverse engineering, we’re currently creating an imaginary file, but a real under writable file. So that’s it that is approved, conditioned upon her first paycheck when she goes to work as a teacher, whatever, but but they’re not just kind of hoping, well, you know, I’m gonna get a job. And so the other side and the mediator and the other attorneys judge or whoever, like, Let’s give her this, give her six months or a year, whatever. But no they can know almost to the day when they’re going to be able to get that done.

Holly: That’s super helpful. I mean, it’s exactly like you just said off in a mediation, and how much time Are they going to need, we’ll give them you know, six months, we give them a few years, well, the other side doesn’t want to give a few years because they want to get off the mortgage. So having that information would be really helpful in trying to help those people out.

Noel: Now, the funny thing is this week, a little over a year ago, we did our Texas tour, and we hit 17 states. Not states, cities. And did a did a seminar with attorneys all across the state. So my favorite question was I said, you know, when you’re in mediation, or meeting or negotiate whatever, and you come up with will, she’ll get 60 days to finance or 90 days or a year, whatever. So when you get that number from and almost to a man to a woman, I said, how many of just pull it out of your backside. And they go. So, you know, I’m not in court, a lot but I do hear stories, and it’s like, I need 90 days to qualify. The other side, I want it done in 30 days, and the judge goes, okay, give you 60 days.

So that’s the same thing as pulling it out of your backside. I said, wouldn’t it be better if you knew it actually gonna take six months, but you knew it could happen? It was going to happen in six months, with the with the other party be willing to say okay, I’m just six months, because I know what’s going to happen. Especially. Well, there’s another magic thing called excludable debt. And if you’ve read my I don’t know if I did it on the seminar you were at in January, but excludable debt where you go, you know, if we sign her or whoever him or her the the mortgage debt and give them six months, just because it’s not off of the credit report for the other person, you know, doesn’t mean that that has to count against that other person.

There’s such a thing in mortgages as excludable debt. So that person and we help you be evasive how many transactions we’ve got all the time going on, where we’re helping the wife, she’s going to refinance, and the husband is going to purchase or the other way around. And we’d like you don’t have to wait because that that is not counting against you is called an excludable debt. And again, I hope mortgage people aren’t listening to this because this is a huge secret, but it’s not a secret.

It’s in the guidelines. All four major underwriting guidelines, Fannie, Freddie, HUD for FHA and VA, allow for excludable debt. That has to be written a certain way and the decree and the you know, you can’t just play around with that you got to know what you’re doing. But that’s why a divorce lending specialist needs to be on top of that, and and designing that thing way in advance of when you when they think they’re going to need it.

Holly: That’s a very common misconception, I think among family lawyers that however long it’s going to take the other side to refinance, that person is going to be hamstrung with that debt on their credit and not be able to qualify for anything on their own unless their income is really high. So that’s really great.

Noel: Yeah, and it’s, it’s amazing. I’d say more Family Law Attorneys now know what then mortgage people know. It’s I don’t know why it’s just one of those hidden things. But I forced myself to learn that kind of stuff. So, so I dug down, and I’ve tried to make deals work. It’s like, trust me, I haven’t read the guidelines that thick each book, you know, and that’s not not the updates. I don’t stay up and read that stuff. But I have to research.

But yeah, it’s it’s there. And now it’s it’s serious business. Because if there’s a default, it’s still gonna hurt that person’s credit. There’s a late payments gonna hurt that person’s credit. So there’s probably never a good reason to say, well, it’s excludable. But that’s only excludable in a mortgage at that I can’t answer for car companies, you know, auto financing and credit card. I can’t answer for all that. I can just tell you for mortgages. So anyway.

Holly: So one of the other issues we often deal with when we’re talking about refinancing, and is the buyout process and how to calculate how we’re going to figure out what the house is worth how much you have to buy the other person out for. So can you give us any insight into that?

Noel: Let me do my little appraisal seminar and owelty seminar combined, like in 90 seconds here. That is a almost a cornerstone of, of divorce, where there’s a house involved. I mean, that’s, it’s also a huge part of what we do. So determining value, I have a seminar I need to do that, again. Determining value is a serious process. It’s a federally regulated process, the appraisal. I would say, we can save millions and millions and millions of dollars every month all across Texas, if we just get every family law attorney, don’t order an appraisal. Yes, don’t get one. It cannot even be looked at by a lender. Cannot be considered. Cannot be redone for can’t be looked at. That’s federal law.

And it’s been federal law for over 11 years now. So there’s a specific way to get that appraisal ordered. And and I can share the whole whys and wherefores and everything. But basically, it’s part of the loan process. So get the actual refinance started. Second of all, how do you think calculate, really, we’re headed toward a buyout amount, right? We call it equity. But people don’t know how to calculate equity. So the first thing I do is start getting the customer and the attorneys to think about accessible equity. $100,000 house value, but the $50,000 mortgage does not have $50,000 of equity in it.

Okay, it just never does. If you sell it, you’re gonna part with $6,000 in realtor fees right there. Sellers always have costs. If you refinance it, there are closing costs. So you all of that diminishes from equity. So there are some calculations I have, if anybody’s interested, just email me, there is a simple spreadsheet that I prepared that shows five different calculations, which illustrates that there’s no legal way to say that is the equity in, that’s what has to be paid or half of that, whatever. So you need a good accessible equity worksheet, which to me is a rational look at what someone could expect in a buyout.

Now, again, that’s an area where I don’t say, this is the buyout that has to be this much. And that’s what we calculate. And therefore we’re going to try to impose that only on anybody. That’s why I give calculations and I say, look, here’s how you calculate it, without taking into account. The costs or the limits to financing. So determining equity, determining equity, I try to change that to accessible equity. And then you’ve also got limits to financing. So anyway, a good spreadsheet like that will help everybody figure out okay, this is a rational way to get to a buyout amount. Sorry, that was more than 90 seconds, but I tried to jam it into a short time there.

Holly: So and that kind of ties along with owelty liens and when those would be appropriate to consider for Family Lawyers. Because I think there’s a misconception out there that you can only borrow up to 80 80% of the value of the house on your buyout. But that’s not actually the case in a divorce proceeding. So how, how much can people borrow for a buyout and how do you determine all of that?

Noel: The limitation to 80% is when you cash out, that’s where people get that idea from. And it gets legs and it goes about the streets. And it becomes all sorts of things like you can’t finance more than 80% after you for any kind of refi, and none of that is true. There is a 80% percent limitation, if you have cashed out before, it used to be in perpetuity, you could never borrow more than 80% of your home’s value, whether you were cashing out or not. The legislature fixed that a little over three years ago, but they left the 80% limit in for the next transaction. So they cashed out the transaction before, and they’re doing a buyout. In that case, they’re still limited to 80%.

I won’t take time now to tell you how we overcame that, but it might become a case study in Texas soon. But the point is, typically, if you have not cashed out on your home before, if the owelty lien is specified properly in the decree, and it fits the borrower’s need to finance, and that’s a whole other mathematical ball that we get into. But if the owelty lien is properly structured in the decree, homeowner can borrow by industry standard up to 95% of that home’s value. And with FHA, it’s actually a little bit more 97 and three quarters percent. So you can get access to almost 18% of your more of your home’s value, when there’s a buyout, not a cash out. So the the idea is that the constitution provides that an old the lien is a valid lien against the homestead property.

So it’s specifically the magic here is it’s specifically not a home equity lien. And that, by the way, is another reason why we try to use get people not to think in terms of equity, because they’ll say we’ll get an equity loan. Well, there’s two definitions to equity in Texas. One is the difference between an asset value and a liability, minus expenses. And then the other word for equity is a actual legal category of a loan. So we have to be very careful. I have some underwriters, title underwriters that don’t want to see the word equity in the divorce decree, I used to have problems with that.

I don’t anymore because I’ve got better title, you know, understanding and so forth. But they didn’t even want to see the word equity, the word is the word interest, because an owelty lien is a co parsenors, as in a divorcing or recently divorced, co owner, their interest in that property, it’s not their equity in the property. So I did have cases 10 years ago or so, where the authority goes, no, you can’t we’re not if it’s if if they’re paying for their equity in the property. That’s a cash out. So we got a lot of that straightened out. But the owelty is critical. Critical.

Holly: What happens, let’s say we have a lawyer and their client who have already completed mediation, they’ve already got an MSA, they might already have a degree that has basically generic language that so and so is going to refinance and buy out 50% of the other person’s equity are there about this much. And it does not include owelty language, can you still do an owelty lien after the fact and fix this? Or does it have to be specified in the divorce decree in order for it to happen?

Noel: By agreement, the two parties can create an owelty of partition between them. Now very few lenders believe that and will venture into that. And many, and maybe even most title companies do not believe that. But it’s absolutely the case. And that’s why to be a divorce lending specialist, you can’t just say, oh, I think I’ll this, this is a good lead source, I’ll just get a bunch of business. This is a critical what you just said. You touched on a very critical element of divorce related finance. So I can’t go into details about it. But yes, but the so when I take a call, for instance, and you’ve already got mediation, or you’ve already got the final decree, here’s my question, is your ex cooperative? In other words, the decree says they get 50,000 if we get them 50,000, will they cooperate and pretty much sign whatever it takes as long as it’s not illegal or improper in any way.

And that everything hinges on that. So as a family law attorney, you got to be grinning right now. It’s like, yeah, your ex is going to be cooperative, right? You got to believe them. So I mean, what attorney would say yeah, just go we’ll settle on anything and just trust that they’re gonna be cooperative afterward. Obviously, that’s not a tact that we, that you or me or anybody else want to take. So that’s why we’re constantly get us involved early. Let me get involved before the mediation and all that kind of stuff. But I have had to fix stuff after the case. And I’m not a genius. I mean, it wasn’t like, oh, I know how to do that. It’s like, I’d like to close that deal. Now, when he call ties, matter of fact, I’m sitting in the office of a title and real estate attorney who helped to help to innovate a lot of this.

And so yes, it can be done. Don’t ever, ever, ever, ever count on it. Actually, there. I’ve had one case where I actually advised that they leave some certain ambiguity in the decree to be settled later. That’s probably horrible legal advice, and it wasn’t legal advice. It was strategy. It’s all it was, but only one case out of hundreds, hundreds. Otherwise, you know what you want that let’s get it done, you know, right, in the decree. So, but it can be done, you know, don’t don’t give up on yourself. Or your lawyers don’t give up just because it was like, oh, my God, because like, I know, they write me, call me like I did the owelty wrong. Oh, my gosh, I’m a horrible lawyer. Like, no, you’re smarter than most. So you know it, it can be fixed. And that’s what I’m here to do.

Holly: So we’re almost out of time. And I know you’ve given a lot of excellent advice for Family Lawyers today. But if you had one more piece of advice to give to Family Lawyers, what would it be?

Noel: I would say connect up with a divorce lending specialist that you can trust sooner than later. Don’t try to figure out who needs that person or not. If you want to know how to how to kind of vet a divorce learning specialist I’ll give you my opinion. You know, just email me [email protected] and defaults to the but just [email protected] and you can write me and I’ll I’ll help you find somebody.

Holly: Great. Thank you so much for taking the time to join us today. I know I learned a lot of new things that I can implement into our firm’s practice when it comes to real estate transactions and divorce and hopefully a lot of other lawyers will feel the same.

Noel: The privilege is all mine. I’m very very impressed with you and and what you your operation is doing and has done. You’re a number one. Thank you.

Holly: Thank you.

Voiceover: That Texas Family Law Insiders podcast is sponsored by the Draper Law firm. We help people navigate divorce and child custody cases and handle family law appellate matters. For more information, visit our website at

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