CDLP Expert Reveals Real Estate Divorce Strategies

Karla Kyte, CDLP (00:00)
People think that if they have a Fannie Mae or a Freddie Mac loan that they can’t assume it after going through divorce when in fact, most of the time they can, they’re just asking the wrong questions.

So that’s a big misconception.

Erika (01:43)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Karla Kyte, and she has a lot of unique experience and expertise in the lending space. Karla, it’s great to have you on the show today.

Karla Kyte, CDLP (01:59)
Thank you so much for having me.

Erika (02:01)
So Karla, let’s dive in. For folks who aren’t familiar with your world, give us the rundown. How did you get started in lending and what’s your specialty?

Karla Kyte, CDLP (02:10)
Yeah, so interestingly enough, my specialty is divorce. I work 100 % in this space today. And I actually got into lending because I was getting ready to go through my own divorce and I wanted to have something that I could support myself and support my children and not have to ask for support from my ex-husband. So that’s how I actually landed in this space. I didn’t really niche down into just divorce until about 15 years later.

And it really came out of just a lot of frustration from working with clients who had been through divorce and their agreements were just not written properly. And so the agreement that they have with their ex really hindered their ability to qualify for a mortgage. So that’s kind of really where it built from and when I stumbled on the certification and so on.

Erika (03:00)
Was there like a particular moment for you in your journey that you knew this was the path you wanted to take?

Karla Kyte, CDLP (03:06)
Yeah, you know, I did my certification in 2017 and didn’t really start pursuing it hard until at a point in 2022 after I brought my daughter on as a business partner and she was able to run the lending side of the business and really run our mortgage team. And it just allowed me that space because you’re pursuing something completely brand new. So, you know, it was, it’s a lot of networking. It’s a lot of

I mean, it’s kind of strange to come from, know, we were over a hundred million dollar producers and then to just step back into a space where you’re starting completely over. but it was a new, I don’t know, a new fire in my belly, I guess. I had been in lending for so long and COVID, honestly, I went through some burnout during COVID because we were so busy and I worked so much.

And so being in this space has really, I don’t know, mean, it’s very inspiring. First of all, when I’m able to help somebody through this space and keep them in homeownership and they’re so grateful for my information and my knowledge, that matters to me. Like that’s what really makes me get up every single day is that.

I know that I have the information and the knowledge to help these people through this where they’re not going to get it. There’s not very many of us actually nationwide that do what I do.

Erika (05:19)
Yeah, I love your passion for it, Karla. As you know, with divorce mortgage lending, you’re in a very specialized space. What would you say is one common misconception that clients have when they come to you, and how do you help them see the bigger picture?

Karla Kyte, CDLP (05:35)
Yeah, like first of all, people are in a very, very weird mental space when they’re going through their divorce. I’ve been through my own divorce, so I know what it’s like. You’re kind of not yourself and you really need to have the team of divorce professionals around you to really safeguard you and keep your head in the game, really, you know, because there’s so many people. I mean, I just met with a lady last week that said,

You know, she was so frustrated. Her ex-husband was a raging alcoholic. She really just wanted it over and done with. And then after the fact, she realized that she walked probably from hundreds of thousands of dollars on commercial properties that he owned. And she just didn’t have an advocate in her space. So, you know, that’s not necessarily what I do, but really trying to keep people in homeownership is, is my biggest thing. And right now,

It’s dealing with everybody has these low interest rates that they got over the COVID years. They either bought or they refight into a very low rate. Now they’re going through divorce and they’re trying to figure out how do I hold on to that? So I help a lot of people through that. That’s probably one of the biggest misconceptions.

People think that if they have a Fannie Mae or a Freddie Mac loan that they can’t assume it after going through divorce when in fact, most of the time they can, they’re just asking the wrong questions.

So that’s a big misconception.

Erika (06:59)
Yeah, Karla, what’s a strategy that you sometimes use ⁓ in your area that helps people get set up for long-term success?

Karla Kyte, CDLP (07:07)
Yeah. So first of all, I have my own company. It’s called My Divorce Mortgage Planning. And I literally work with these clients. It’s a fee-based consulting company. And I work with these clients during the divorce, not afterwards, but during, so that we make sure that what they’re negotiating and putting on paper is actually going to work in terms of qualifying for a mortgage afterwards. So I take them through and we get very strategic and we look at

what can you qualify for right now without receiving any support or maybe you’re the one paying support, right? But we want to make sure that you’re setting yourself up properly because there are, you know, we can move around some assets and make some different things work so that you can qualify moving forward. So we run through that process, you know, and then after we figure out legally what is going to be there, it’s like,

Legally, how are the assets going to be split? Legally, what is the support going to look like? Then we can even move some more stuff around to see how we can keep them both in home ownership. And that’s really my goal. And you know, for those of you that are listening to this, you know, if you’re a realtor and you’re working with clients that are going through a divorce, most people think my attorney is going to just help me through all of this, right? If you’re going the attorney route, you don’t have to, but

If you’re going the attorney route, think my attorney is going to help me figure out all of this. Attorneys do not understand lending guidelines. There are a few of them that understand some very basic lending guidelines, but they don’t understand the ins and outs. That’s not their job. It’s not their job to put together a successful plan for you to stay in homeownership. If I can, I will keep both clients in homeownership. One person maybe keeps the home and the person leaving buys a new home.

or maybe they’re gonna sell the current home and they’re both going to buy a new home. It’s really difficult today because prices are high and interest rates are high. So it takes a lot of really strategic planning to help these clients through this phase properly.

Erika (09:04)
Yeah, yeah, I can imagine. And speaking of needing to be strategic, I’m sure you’ve had a moment where there was a tough settlement negotiation or some sort of deal that may have tested your patience. Would you mind sharing one of those moments in your journey?

Karla Kyte, CDLP (09:54)
Yeah, I mean, I’ll be honest with you. ⁓ If I’m involved during the process, I don’t usually run across a whole lot like this. It’s more when they come to me when it’s too late, like maybe they’ve already been in a lot of discussions and they have like a settlement that’s due next week, or maybe they’ve already settled and then they’re coming to me afterwards and there’s something that’s wrong in the separation agreement.

I mean, I have numerous examples, but I’ll give you one of them. I had a client who, through the divorce process, she has agreed to assume the current mortgage. And unfortunately, she never did her due diligence to figure out if she would qualify to assume this mortgage, when in fact, she does not. Like, she’s not even anywhere close. She’s self-employed, even though she has a franchise.

She didn’t think that she was self-employed, but that’s absolutely how a lender will look at her. And that’s my problem. Consumers don’t know and really understand the lending business enough to know if they really qualify or not. Sometimes it’s easy, but most of the time it’s not. And so she settled that, and her agreement is that she will assume that loan within six months of final decree. Final decree was about four to five weeks ago.

And I can’t find any way for her to assume this loan. The next step would be, she refinance and does she have a co-signer? Because she’s not going to qualify for anything on her own. like all of this stuff can just be, there’s so much that can be avoided if they reach out to me sooner, a lot sooner during the process.

Erika (11:29)
That makes a lot of sense. Karla, I know we were talking earlier about networking and how much you love it. Can you share for our listeners who are new to the real estate and lending space, what has been the biggest game changer for you with building those relationships?

Karla Kyte, CDLP (11:47)
⁓ yeah. So I really, ⁓ when I really started out, pursuing just the divorce side of this, ⁓ I stuck with my realtor connections that I knew because that was my safe place. I mean, I’ve been lending for so long in this town. So I started teaching a lot of continuing education to get it out there to the real estate community, but it was a game changer when I started getting it out to the divorce community. ⁓ and

just overcoming that fear of being in a different space, you know, approaching attorneys and you know, they’re people just like us, right? Just because they’re an attorney doesn’t make them any different. And you know, they go out and drink and party just like us and you know, they socialize just like us and they don’t always want to be up there either. just showing up at their events is…

probably the biggest game changer for me. And there’s a lot of really, really wonderful people in that space. And a lot of them are doing a lot of different work. And I think, you know, if you’re a real estate professional, understanding how much opportunity is in this space, this is a very, very big business. And there’s, you know, there’s attorneys, there’s mediators, there’s licensed legal paraprofessionals. Those are kind of state specific. There’s divorce coaches.

There are certified divorce financial analysts. There are forensic accountants. So these are all these these people that specialize just in divorce, right? Oh, did I miss there’s CDFAs? Did I say CDFAs? I think I did. Anyway, you know, there’s there’s a lot of people in this space that you can it kind of opens up a lot of new doors for you for networking.

you know, instead of those same old networking groups that you’re maybe going to.

Erika (13:31)
Yeah. Karla, with all your experience in this space, what kind of advice would you give to a real estate agent who gets a client that is going through a divorce and as an agent, they have not experienced this before?

Karla Kyte, CDLP (14:26)
Yeah, so take control of it. What I find with a lot of realtors is when they get a phone call from their past client, their neighbor, their friend, cousin, whoever, that’s going through divorce, they want to tiptoe around it because they’re not really sure who their client might be, right? It might be one or the other because one person might keep the house. And so they kind of tiptoe around it and they say, okay, well, you know, let me know how I can help.

If I can help you with the value on your house, you know, keep me posted and they don’t just kind of take that control. So the best thing for you to do is to have a really good list of divorce professionals that you want to refer them to because trust me, as soon as they get to their attorney, they will do whatever their attorney says. I don’t care if this referral is your little sister. Once your little sister goes to an attorney, the attorney will dictate the entire process from there.

So you want to have your own attorneys in your corner that you’re referring to because they’ll make sure that that transaction then comes back to you if when it becomes a transaction, right? So take control of that. Another big thing is that, you know, you might, these might be very good friends of yours or acquaintances and you might know that they might be very high net worth clients, right? And so,

One of them might come to you during the process or even after the process is finalized and say that they want to buy a house and you’re thinking, hmm, how are you doing that when you’ve been a stay at home mom or a stay at home dad for the last, you know, 15, 20 years, but they’re, they say, well, that’s all right. I’m getting a lot of support. I’m getting like 25 grand a month. So you’re thinking like, all right, 25 grand a month. There’s no way that they can’t afford this $6,000 a month mortgage payment, right? Like makes total sense.

The problem is, is that as a lender, we don’t accept that 25 grand a month until it’s been paid for a certain amount of time. And it has to continue also for a certain amount of time past the closing on the loan. So I’ve had several realtors come to me and say that they’ve taken clients out like this, taken them shopping, gotten them under contract only to find out that the lender couldn’t get the deal done. So you really, really, I don’t care how high net worth you think they are.

or what kind of assets they’re getting from this divorce transaction, you need to make sure that it was written in a qualifying manner for the lender if they are in fact going to get a loan. A lot of divorcing clients wanna take their big pile of cash and they wanna just pay cash for a new house, but maybe their big pile of cash is not enough. So that’s another one too. Like there’s a lot of ways, you know, we can take that asset and we can…

often turn it into income generating money for them so that they can, know, maybe with 500,000, maybe they can buy an $800,000 house and take out a small loan as opposed to just buying a $500,000 house. So it’s really important that it’s really important that you’re working with a CDLP that really understands this space. I mean, a little plug for myself is that

There’s not very many CDLPs that run a fee-based business that actually take the time to do the planning during the divorce. So that’s important too, that they make sure that they are referred to and working with somebody that can actually help them through this process during the phase.

Erika (17:45)
Yeah, totally. That makes a lot

of sense, Karla. I want to ask you what’s next on the horizon? Is there a challenge that you’re focused on solving? You got a vision in mind for the future?

Karla Kyte, CDLP (17:56)
⁓ you know, I wake up every morning with a massive frustration of, know that people just don’t know what they don’t know in this space because every time I have the opportunity to get in front of an attorney or a realtor and explain what it is that I do with my planning, they’re completely blown away. I mean, I will talk to attorneys. do continuing legal education for attorneys as well. And, I have taught some of them.

that have been in the business for 25, 30 years and they’re blown away. They’re like, my God, never knew this. I’m like, how? How have you been helping people get divorced for 30 years and this has never crossed your mind? So what’s on the horizon for me is just getting out there more.

I want to find as many mountaintops to scream this from, so thank you for having me on as a guest because I just need to do more of this and get myself out there more so that people really understand what their opportunity is to stay in homeownership during divorce. I know it was important for me and I think it should be important for everybody.

Erika (19:04)
Yeah, absolutely. We’re

thrilled to share this message with our audience, Karla. Hey, before we wrap up, if someone wants to reach out, connect, maybe they need help with their lending. What’s the best way for them to reach you?

Karla Kyte, CDLP (19:19)
Yeah, so ⁓ I will be completely transparent here. I no longer do free consultations. So if they go to my website, it’s mydivorcemortgageplanning.com. And if you go to my website there, you can book a call through my website. And if they decide to retain me after that, the cost of that call actually goes towards the fee if they retain me for their divorce mortgage planning. And I teach a lot.

I’m all over social, you can find me on Instagram, you can find me on Facebook, you can find me on YouTube. All of those links are in my website as well. I do as much educating as I can. Everybody needs the individual strategic planning, so most people can’t really take what I say and just run with it. They’re gonna have to connect with me at some point anyway.

⁓ But it might help them get to a certain spot and they might learn something that they didn’t even know Existed like that. They can assume their current loan. Most people don’t know a lot of that

Erika (20:17)
Yeah, yeah, I didn’t know about that either. Karla, thank you so much for dropping all this knowledge today. I just love how you’re helping people go through such a tough transition, but all your clarity and all your care is really awesome.

Karla Kyte, CDLP (20:31)
Thank you. Thanks, Erika.

Erika (20:32)
for everyone tuning in. If you got value from this episode, make sure that you’re subscribed to the Real Estate Pro Show. We’ve got more conversations coming up with operators like Karla who are making a real difference in real estate. We’ll see you on the next episode.