This blog article is from Jeffrey B. Thomas, J.D./CIMA®/CDFA®, a Dallas-based Certified Private Wealth Advisor and Financial Advisor with Raymond James Financial Services, Inc.
“Getting the house” – once the most coveted prize of a divorcing couple – has become a recession-era issue for divorcing couples.
Excess loan to fair market value challenges, insurance costs, reduced liquidity, increasing utility costs, maintenance considerations and undesirable neighbors all force divorcing couples to reconsider how important keeping or obtaining a residence during divorce really is. If you lived toward the top of your means when married, you cannot divide that lifestyle in half and afford the same kind of home. Even in cases where the divorcing couple wants to sell the home, agreeing upon a value and even the listing real estate broker can be challenging.
The American Academy of Matrimonial Lawyers reported in September 2011 that it had seen an 86% increase in divorce settlement complications over housing debt in the last three years. Fifty-three percent of the attorneys noted a rise in relocation requests for children in custody, but only 21% of those requests were actually being granted.
The federal government is actively considering various proposals to give homeowners that are current on their mortgages some relief to refinance their homes even if the value of the debt exceeds the value of the home. While refinancing a home is not the end-all of the issue of ultimate home ownership during divorce, it may be important to follow this legislation as it moves through the process.
Losing a home is painful enough for adults, but it can be even worse for the children. Switching schools, finding new friends, and dealing with bitter parents can all add to the anxiety of a child. It takes all of the members of a collaborative law team, plus their network of real estate professionals, to create the best solution available within the reality of a given financial picture. Such a network would include an experienced mortgage advisor, a real estate agent, an appraiser and a property management individual who can accurate advise on potential leasing arrangements of the home pending a sale. Great deference by the parties and the team should be given to these professionals and their collective guidance on an appropriate resolution.