How to Protect Equity in Divorce WA State?

Question

Hello. I'm Thomas and could really use some guidance on protecting and eventually receiving my share of equity in the marital home.

I'm finalizing a divorce in Washington state. I paid for two different consultations with a divorce and real estate attorney. And received different suggestions.

I'm happy to pay someone here for a consult on how to protect myself and reach an agreement.

My ex's attorney is waiting for my response. Trial, which we've already postponed once, is set for early March. She said we need to have everything agreed to and entered in the final order with the court to prevent trial, even though we've agreed on every point except this one.

Specifics:

*  Finalizing divorce.*  Washington state.*  Wife and I both on title.*  Only wife on mortgage.*  Equity in the home.*  Wife will continue to live in home.*  Wife responsible for maintenance and repairs.*  Wife cannot refinance and pull out my half of equity because she is self-employed and W-2's minimal income.

Obviously, the cleanest and safest route (for my half of the equity) is to force sell of the home. However, there's a human element and I do have compassion for my ex. So, I don't want to do this. And, I don't want to carry a note. The less contact between my ex and I, the better.

My ex's attorney has suggested the following, which feels like it provides little protection for me:

*  We both remain on title.*  We get three CMAs and/or appraisals and agree on current market value.*  Include a "forced sale" clause executes in 12 months if ex is unable to refinance and cash me out during that time frame.*  Wife pays a to-be-agreed-upon interest rate on my half of the equity until it is cashed out.

Questions:

* How would you resolve and protect yourself, outside of selling the home?

* What requirements and contingencies (i.e. umbrella and earthquake insurance policies; ex to forfeit some or all of her share of equity to make me whole, etc.) would you include for protection against possible forms of loss (i.e. lawsuits, natural disasters, mortgage default, property neglect/deterioration, etc.? )

* Should I remove myself from title to limit potential liability while placing a second lien in the amount of my share of the equity?

*  Can/should I include a clause that home be appraised now, and at the date of my equity cash out, and the higher of the two values be used?

*  What language to include in the "forced sale" clause so ex has no legal recourse or ability to stall or delay?

Thanks a lot for your time and consideration in replying. I truly appreciate it.

Thomas

Seattle, Washington

Guifre Mora · Answer

Hello, Thomas, I'm sorry about your situation, I won't comment on the legal aspects of the divorce as this is not my forte. But as a lender, she is able to refinance in the Non-Prime lending space. There are options for qualifying her.

Loan Amounts:•$50,000 Minimum to $7,000,000 Maximum – Owner Occupied.

Income Documentation:Full Doc - W-2’s & Paystub, 1040’sAlt Doc - 12- or 24-months bank statements.VOE Only Program – For NON-Self-Employed Borrowers Only:•Verifiable VOE from Employer (not self-employed or self-prepared). The VOE must be fully filled out and must include all income and averages. The VOE must be signed and dated by the employer with accurate contact info.1099 Only Program: For Non-Self-Employed Independent Contractors•2 Years 1099’s•Verbally verify accuracy of income on 1099’sK-1’s Only Program:•2 Years of K-1’s•CPA, certified tax preparer or enrolled agent attesting that K-1’s are accurate & borrower self-employed for 2 years or more.P&L’s Only Program – For Self Employed Borrowers Only:•Full-year 2018 Complete Profit and Loss Statement and 2019 Complete YTD Profit and Loss Statement•Professionally Prepared P&L’s – Verifiable letter from licensed CPA, Certified Tax Preparer or Enrolled Agent attesting that they prepared the P&L statements.•Borrower Prepared P&L’s – Borrower to sign and date the P&L’s and attest to the accuracy of the P&L’s via a handwritten, signed and dated letter. And a verifiable letter from a licensed CPA, Certified Tax Preparer or Enrolled Agentattesting the borrower prepared P&L’s are factual.•Proof that the borrower has been self-employed for that business for 2 years.Asset Depletion Program – Available for All Employment Types including Retired/Unemployed:•Qualifying income is based upon Total Assets Eligible for Depletion, less down payment, less out of pocket closing costs, less required reserves, divided by 84. This amount will be used as the monthly income. Debt calculations will need to include all debts, not just housing debts.