No one else - other than my readers and subscribers - know to do these three things. Yet, if you employ these three simple tips, you will be in the TOP 1% of attorneys and mediators - really, the top fraction of a percent. It will not always be this way because word is getting out - slowly, steadily, but surely. Be a leader and show your colleagues the way.
These tips will set you apart as a family law specialist. When you pull these cards from your hand, it will have the value of near shock to opposing...and, in a good way. They will not expect this. They have NEVER seen it, unless per chance, they have been on the other side of a customer with whom I have been working.
Continuing Series: Things My Platinum Inner Circle Attorneys Would NEVER Do
This really happened. I leave the dates on the email exchanges but have, obviously, removed the real names of the people involved...to protect the innocent and the guilty.
Opposing for a case/file on which we had already obtained credit underwriting approval (i.e., loan was approved subject to appraisal and final divorce) refused to allow our customer to let an appraiser in the house for it to be appraised.
Get this: opposing wanted money, they wanted money from the refinance of the house but opposing (attorney and client) would not allow the house to be appraised. Wife (we were getting the loan for husband) had refused to allow access up to that point.
Attorney actually memorialized this silly refusal in an email...the first exchange below...keep reading.
Spoiler Alert. Scroll to the bottom to see how it turned out.
The chain of email communication:
From: Opposing Attorney
Sent: Thursday, January 3, 2019 1:39 PM
To: My Customer’s Attorney
I talked to my client about the appraisal and settlement. She will sell all community assets to husband and forgive all debts he owes her for the sum of $250,000. She will not allow an appraisal [emphasis mine]. Call me at 214-555-DUMB if you want to discuss.
Opposing Attorney, Esq.
Husband (my customer) responded – rather appropriately I think - to this nonsense:
Sent: Thursday, January 3, 2019 3:31 PM
To: Customer’s Attorney
So, let me get this straight, I am supposed to get a loan to give to Wife $250K, but the bank can’t [is disallowed by opposing to] do appraisal?
Is this what they teach in Law school these days? Sounds like wasted money if that is what they are teaching.
From me (Noel, bent over double laughing):
Dear Husband/Customer (with Attorney):
Your sentiments are spot on. And, I totally agree.
For what it’s worth, I do my best to be supportive of the legal profession – I am supremely complimentary of lawyers every chance I get, as I have been about your attorney who deserves kudos and high praise. But Mr. Opposing Attorney’s statement doesn’t pass any test. It betrays not only an ignorance of financing but a deficiency of logic. I’ll let legal professionals weigh in on what sort of legal test his statement may or may not pass. My guess is that there is hardly any sound legal argument for his position.
Put simply, Mr. Opposing Attorney needs to be in possession of a few facts:
I’m not a lawyer; and, your Attorney can certainly predict the court’s behavior with greater accuracy than can I or any layman. But I think I can argue against Mr. Opposing Attorney’s position after imbibing 8 margaritas and a handful of pain killers. His position and that of his client’s is laughable. If he wants to argue before a court that Husband cannot have his lender perform an appraisal, Mr. Opposing Attorney will have to state that:
*From my experience and perspective, a small percentage of judges can be as ignorant, obtuse and obstinate about financing as anyone. (Who am I to talk, eh. I'm no stranger to ignorance). Generally, they are cooperative with rules of financing, once they understand them. But I would NEVER assume that they understand these matters without clear explanations. Still, the point on which all of this turns is if the objecting lawyer (or a judge who might side with him) will lend Husband the money at good terms. If not, they should rule according to what Husband’s Attorney submits and how I have designed the Owelty (buyout). Remember the Golden Rule.
Thank you. (Please forgive the sarcasm but this attorney’s behavior begs for it).
America’s Premier Divorce-Lending Specialist
office 972-724-2881 † mobile 817-454-4555 † fax 866-295-0567
601 W. NW Highway † Suite 200 † Grapevine, TX 76051
I try to explain divorce-related mortgage financing in a variety of ways. Sometimes, just saying something from a different perspective helps to break through the fogginess on a matter. I don’t talk or write like an attorney. Rather, I have to make deals work in the realm of mortgage finance. Yet, I still must interact and live within the legalities of divorce law, real estate law, and finance law – as well as industry standards in all of those categories.
So, here goes one of those “from a different perspective” attempts to explain the DIVORCE BUYOUT. In Texas, we deal with the Owelty. Texas is the only state that has an actual lien on property (by design or default) for a divorce buyout. In other words, one may or may not use the word “Owelty” when citing a buyout; but, if an amount of percentage of “equity” is tied to a spouse’s interest in a marital residence, the Owelty of Encumbrance has been created. That’s what I mean by “design or default.” You can intend it or not intend it – it is created when that language is used in a decree.
So, here is a letter I sent out today to one of my elite attorneys who had referred a client for financing a few months back. After every loan closing/funding, I update the attorney and provide documentation that verifies the client has complied with the settlement as it relates to the financing and buyout requirements.
Names and precise figures have changed slightly for security and clarity.
But first, here are the numbers of the BUYOUT in the loan we just funded.
Total Buyout $100,000.00
Car Payoff 20,000.00
Atty Trust Account 5,000.00
In Texas, the buyout is an Owelty Lien. In all other states, there is no lien, NECESSARILY. I have instructed on this recently and will instruct on it in the near future.
Thank you again for connecting us with Juan Gonzales. We have closed and funded his refinance loan. Funds for wife’s buyout amount of $75,000.00 have been wired to her account; and the other funds have also been disbursed. (See attached wiring confirmations).
I do not have a copy of the check to ABC Credit Union but I will shortly. The FedEx air bill that shipped it to Mobility is attached.
As is the case with all of your clients, Juan should be congratulated for hiring the best. You are awesome, attentive, astute, diligent….just a professional amongst professionals. It’s a great honor to work with you.
To reiterate a point that is often lost – Juan’s loan was structured as it would hardly ever be structured in any other situation or by any other lender (if I say so myself). This loan is a regular, “plain vanilla” purchase-money transaction – the same class of lien with which he purchased the house. Specifically, it is NOT a Texas Home Equity loan (attended by all its restrictive limitations, higher rates, etc.). The key element is how the Owelty was cited in the decree, how it was disbursed per the Proceeds Allocation and, of course, the fact that the ancillary real estate documents created an Owelty of $100,000 (not $75,000).
You are in an elite category of attorneys in the entire country who understand this and, more importantly, establish the mechanisms which make it work. Congratulations!
Thank you for introducing me to Juan. He is the finest of finest of customers and citizens. We are honored to know him and hope to be friends for life.
At Your Service,
I have been following your emails and blog for some time, being a family law specialist in Texas; I have moved to Tennessee and been teaching domestic relations in a little law school up here for a while, and my question is pretty simple.
Thank you for your time, and Merry Christmas.
Still Licensed to Practice in Texas, Teaching in Tennessee
♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
So great to hear from you. I remember you well. I remember when you moved. I remember being happy for your opportunity in Tennessee and a bit disappointed that Texas was losing you. Glad you’re doing well. And, thanks for reading.
It’s interesting you should ask this. I am writing courses and materials for other states right now. And, here are the two main points of my initial synopsis/thesis:
To the second part of your question –
I consult on those loans/cases but my “multi-state desk” handles the actual loan. My mortgage bank handles loans in all but a few states; I am personally licensed in Texas and California and my branch is licensed in those two states as well as New Mexico, Oklahoma and Arkansas. So, we can pretty much handle the business anywhere.
As to the Owelty question, let me just add that it’s amazing how mortgage financiers are missing this in Texas (a little less now that more mortgage folks have learned about the Owelty) and in all the other states. The mistake they are making is that they are “cashing out” rather than “buying out” – and there is a HUGE difference between the two.
So, until I get all the states studied out thoroughly, I recommend that divorce settlements (decrees, property settlements, etc.) specify the buyout and cite an actual lien – probably in the style or class of a vendor’s lien (might be called by various names – just avoid the word “equity” at all costs since equity financing is what triggers onerous limitations not only in Texas where it is law but in all the other states wherein limitations are per industry standards).
In point of fact, the Owelty lien (in Texas) is of the same lien type as a vendor’s lien. Vendor means “seller.” So, in every sense, the divorce buyout, being the selling of one’s interest in a property, is of vendor quality and kind. Hopefully, some simple research will indicate which liens are valid per state law and which are suspect.
I hope this helps. I’m so happy that we are still connected.