kimbigideasMany of my students repeatedly ask me, “Do I need both the Wife and the ex-Husband’s financial documents when negotiating a short sale?”  I let them know that there are several variables that I need in order to give them an answer.  In order to have a clear understanding of whose financials I need to collect, I need the following information:  Property Appraiser sheet (who’s name is listed as owner?), a copy of the last recorded Deed (who’s name is on there?), a copy of the Property Settlement and Judgment of Divorce (who was awarded the property and does it contain verbiage stating that a certified copy of the Judgment of Divorce and/or Property Settlement can be recorded in lieu of a Quit Claim Deed).

FOR EXAMPLE:  Husband and Wife bought the house together with a Mortgage and Note from Wells Fargo.  They then get a divorce and the Wife is awarded the house with no interest from the ex-Husband.

When Sellers get a divorce, typically one party will say they want the house and that person will be solely responsible for the debt on the house.  A good attorney will ensure that there is specific verbiage in the Judgment of Divorce and/or Property Settlement which states that the Wife is going to be responsible for the debt on the home and that the ex-Husband will Quit Claim his interest by Deed over to the Wife so that he is no longer on the property.  In addition, a good attorney will add verbiage in the Judgment of Divorce and/or Property Settlement which states that should the Husband not sign a Quit Claim Deed to transfer the property over to the Wife, then a certified copy of this Document (Judgment of Divorce and/or Property Settlement) may be filed with the Recorder’s Department in lieu of (instead of) a Quit Claim Deed to transfer the property.

Unfortunately I have found that many attorneys do not completely follow up with the Quit Claim Deed nor do they put the correct verbiage in the Judgment of Divorce and/or Property Settlement in order for the transfer to be complete.  This is mandatory for proper flow in the chain of title. So now what?  Who’s financials do I collect?  It will always be the Wife and not the ex-Husband.

Let me back up and tell you facts when it comes to a Mortgage and Note that both the Husband and Wife have taken out on their property.  The Mortgage is a lien on the property and the Note is a promissory note or promise to pay.  Just because the one party agrees to take over the responsibility of the other person’s debt in a divorce action, it does not release them from the liability of the debt unless the Wife who was awarded the property in the divorce obtained new financing to totally remove the Husband.  So … what do you do?

After looking at the Property Settlement and/or Judgment of Divorce, if a certified copy of the Judgment of Divorce has the specific verbiage of transfer, I would not need a Quit Claim Deed.  I would send a copy of the documents to the title company to confirm that they will insure the chain of title with this document being recording versus requesting a Quit Claim Deed.   If the ex-Husband will agree to sign a Quit Claim Deed to complete the transaction, I would request that the title company prepare this so that I can be sure that the ex-Husband is not required to sign any future documents needed in order to complete the short sale and sell the home.  As a Realtor, I would have the Wife sign the listing agreement, purchase agreement, and provide all of her financial documents.  I would request that she acknowledge in her hardship letter that she was awarded the house in the divorce and is unable to keep up with the payments.

I would also provide to the Short Sale Lender a copy of the Property Settlement and/or Judgment of Divorce showing that there was a transfer so that they don’t keep asking for the ex-Husband’s financials.   My biggest concern is to make sure that I obtain a full satisfaction for the lien as the ex-Husband’s credit is still affected by this short sale.  Although he was removed from ownership, which removes him from the short sale process, he is not removed from liability of the debt.  I would also make sure that you tell the Wife that she will be responsible to claim the entire loss on her taxes and not her ex-Husband.

Explain that this is not under your control because you are not a CPA; however, when the Short Sale Lender provides a 1099 on the deficiency, most of the time it will have the social security of the ex-Husband because, in most cases, the Husband is always named first on documents.  The Wife will need to consult her CPA on this, as to how she claims the loss on her taxes.

Make sure you immediately pull title on this property when negotiating, as you may also find liens that the ex-Husband has attached to the property and you will have to ask the title company if these liens will need to be negotiated or can they be removed just by filing a certified copy of the Judgment of Divorce and/or Property Settlement or Quit Claim Deed.

Again to summarize we only need the Wife’s financial documents to do a short sale.  Hopefully she had a good attorney and there was a Quit Claim Deed filed to make your life easier when it comes to processing the short sale.


Happy Negotiating!

Kimberlee Frank

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Kimberlee Frank Broker Short Sale Expert


Kimberlee Frank Real Estate Broker and Teacher/MentorKimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!


Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.

Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!

Kimberlee Frank Author of Big Ideas for Your Business
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.

Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!

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Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.


God Bless,

Kimberlee Frank


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