The Gray Divorce Podcast: Episode 87 When the Math Works, but the Mortgage Doesn’t with Tami Wollensak

Andrew Hatherley |

In this episode, Andrew is joined once again by Tami Wollensak, a licensed loan originator with more than 28 years of experience who specializes in helping divorcing homeowners navigate mortgage and real estate decisions.

Together, they unpack the critical gap between family law settlements and mortgage underwriting reality—and why failing to address that gap can derail even the most amicable divorce.  

When the Settlement Works—but the Mortgage Doesn’t

Tami explains a common divorce pitfall:

  • The asset division looks fair
  • The equity split makes sense
  • The legal agreement is sound

…but no one has confirmed whether the spouse keeping the home can actually qualify for financing.

Mortgage underwriting follows strict guidelines that family law attorneys are not trained to anticipate. Without advance planning, people may agree to outcomes they simply can’t execute post-divorce.  

Why Timelines Matter More Than You Think

One of the most frequent issues Tami sees involves support income and deadlines.

  • Mortgage lenders generally require six months of documented support payments before they can be used as qualifying income
  • Yet many settlement agreements require refinancing or buyouts within 90 days

That mismatch can make compliance impossible—unless timelines are negotiated correctly before signing. Proper planning can align settlement language with lending requirements and prevent last-minute crises.  

Credit, Employment, and Reentering the Workforce

Tami outlines how lenders evaluate borrowers emerging from divorce:

  • Reentering the workforce
    • Returning to a prior profession with a salaried role may qualify immediately
    • Variable, hourly, or self-employed income often requires two years of history
  • Starting a business
    • Requires two years of documented income on tax returns

Understanding these rules in advance can influence career and settlement decisions—especially for stay-at-home spouses in gray divorce.  

Mortgage Assumptions: The Golden Handcuffs Trap

Many divorcing couples are desperate to keep ultra-low interest rate mortgages obtained during recent years.

Tami explains why mortgage assumptions—often seen as the holy grail—are risky if not fully understood:

  • Not all lenders allow assumptions
  • Approval timelines can stretch 6–8 months (or longer)
  • Qualification standards are strict
  • Costs can be significant
  • Servicing transfers can derail the process

Without a Plan B written into the settlement agreement, failed assumptions can force unwanted home sales.  

Why Every Settlement Needs a Backup Plan

Tami strongly recommends that settlement agreements include:

  • A clear primary strategy (assumption or refinance)
  • A defined timeline
  • A realistic fallback option if the first strategy fails

Having these contingencies protects both parties and reduces post-divorce conflict, legal fees, and emotional stress.  

Retirement Assets and Mortgage Qualification

For divorcing individuals over 59½, retirement distributions can sometimes be used strategically:

  • Only one month of distributions may be required for mortgage qualification
  • No early withdrawal penalties apply
  • These strategies must be coordinated carefully with financial and tax advisors

Tami also discusses asset depletion programs, which allow lenders to qualify borrowers based on assets rather than income—an important option for retirees and early retirees.  

Pay Cash or Finance? It’s Not Always Obvious

Andrew and Tami discuss a common gray divorce dilemma: 
Should you buy a home outright with settlement proceeds—or preserve liquidity with a mortgage?

Key considerations include:

  • Access to cash for emergencies and lifestyle needs
  • Tax implications
  • Long-term financial flexibility

There’s no one-size-fits-all answer—but informed planning beats emotional decision-making every time.  

Key Takeaways

  • Divorce settlements must align with mortgage realities
  • Timelines and income rules can make or break financing
  • Mortgage assumptions carry significant hidden risks
  • Backup plans protect against failed assumptions
  • Retirement assets can offer creative solutions
  • Early planning reduces stress, cost, and regret

Final Thoughts

Divorce is not just a legal event—it’s a financial restructuring, and housing decisions are often the most consequential.

By involving mortgage professionals early and planning collaboratively, divorcing couples—especially those over 50—can avoid devastating surprises and move forward with clarity and confidence.  

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