“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon t

That’s because Kronthal, a mortgage loan officer for the Delaware-based Residential Home Loan Centers, resolves the marital foes’ money woes with affordable arrangements for living apart.

His goal is to solve the puzzle of who should stay in the marital home and assume the mortgage — and who should go — not an easy task for splitting couples facing a debt and possibly two mortgages.

Matchmaker, make me a match

Working from his home office along the scenic Delaware shore, Kronthal is a kind of broker middleman, searching to match his clients with lenders around the country and negotiating the best price.

Financial real estate transactions that arise out of divorces are tricky because in virtually all divorce cases, one of the parties will buy out the other, and the party bought out will usually be buying a home within a year, he said.

However, with the March 13 collapse of about a dozen subprime lending institutions, Kronthal no longer has the same options or tools at his disposal.

“There is still a subprime market out there, but allowable credit scores have risen, state income programs have been greatly curtailed and a number of lenders have gone out of business,” Kronthal told Broker Newswire. “I know of at least four lenders in the region that have closed their doors.”

New conservatives

The housing slump and subprime implosion “make it more difficult because there are not as many products out there,” he said. “Lenders are more conservative and everybody in the industry is hungry for business — at least those still in business.”

Every scenario with a divorcing couple is different. Sometimes Kronthal counsels with one or both of the marital partners; sometimes with their lawyers — and sometimes mediators are also invited to the table.

The most crucial decision to make is whether the wife remains in the house with the children or whether the husband assumes the role.

“Judges in the state of Maryland now have the authority to award the house — the former marital home — to one of the parties with the provision that if there is an existing joint mortgage, the name of the party not awarded the home, is taken off of the mortgage,” Kronthal said.

Creative financing

That’s where the creativity comes in.

“It’s typical for the wife to have been out of the labor force for a couple of years and become a stay-at-home mom raising children, while the husband was the primary wage earner,” Kronthal said. “When the parties get divorced, the wife has to return to work and doesn’t have an employment history. So I go out and find products to accommodate her.

“That is where the no-doc loans come in,” he said. “The loan-to-value ratios are comfortable enough for lenders to lend to people re-entering the workforce — especially with a good credit history and credit score of more than 660 — sometimes less for different lenders.”

Limited-documentation and no-documentation mortgages once were used primarily by self-employed professionals, small business owners and individuals heavily dependent upon periodic bonuses or commissions, according to columnist Kenneth R. Harney.

In no-doc programs, applicants typically state their income and assets to the loan officer but are not required to show detailed proof of that information for the lender’s files.

Twenty-two percent of brokers in a recent study by Inside Mortgage Finance, reported low-doc clients had “divorce or other legal circumstances that complicated their financial profiles.”

Trading post

The trade-off for lenders is to be able to charge higher rates and compensation for the loan originator.

Kronthal made the move from divorce lawyer to loan officer three years ago when housing sales began to slump.

“I got into this business because I had handled so many divorce cases, and these kinds of actions were not uncommon,” he said. “And I didn’t think loan officers were giving my clients good financial advice.”

Kronthal and his family left Maryland and bought a home on the Delaware shore where he also set up shop.

Despite the housing slump and subprime collapse, Kronthal is cautiously optimistic about the future.

“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon th

“There is still a subprime market out there, but allowable credit scores have risen, state income programs have been greatly curtailed and a number of lenders have gone out of business,” Kronthal told Broker Newswire. “I know of at least four lenders in the region that have closed their doors.”

New conservatives

The housing slump and subprime implosion “make it more difficult because there are not as many products out there,” he said. “Lenders are more conservative and everybody in the industry is hungry for business — at least those still in business.”

Every scenario with a divorcing couple is different. Sometimes Kronthal counsels with one or both of the marital partners; sometimes with their lawyers — and sometimes mediators are also invited to the table.

The most crucial decision to make is whether the wife remains in the house with the children or whether the husband assumes the role.

“Judges in the state of Maryland now have the authority to award the house — the former marital home — to one of the parties with the provision that if there is an existing joint mortgage, the name of the party not awarded the home, is taken off of the mortgage,” Kronthal said.

Creative financing

That’s where the creativity comes in.

“It’s typical for the wife to have been out of the labor force for a couple of years and become a stay-at-home mom raising children, while the husband was the primary wage earner,” Kronthal said. “When the parties get divorced, the wife has to return to work and doesn’t have an employment history. So I go out and find products to accommodate her.

“That is where the no-doc loans come in,” he said. “The loan-to-value ratios are comfortable enough for lenders to lend to people re-entering the workforce — especially with a good credit history and credit score of more than 660 — sometimes less for different lenders.”

Limited-documentation and no-documentation mortgages once were used primarily by self-employed professionals, small business owners and individuals heavily dependent upon periodic bonuses or commissions, according to columnist Kenneth R. Harney.

In no-doc programs, applicants typically state their income and assets to the loan officer but are not required to show detailed proof of that information for the lender’s files.

Twenty-two percent of brokers in a recent study by Inside Mortgage Finance, reported low-doc clients had “divorce or other legal circumstances that complicated their financial profiles.”

Trading post

The trade-off for lenders is to be able to charge higher rates and compensation for the loan originator.

Kronthal made the move from divorce lawyer to loan officer three years ago when housing sales began to slump.

“I got into this business because I had handled so many divorce cases, and these kinds of actions were not uncommon,” he said. “And I didn’t think loan officers were giving my clients good financial advice.”

Kronthal and his family left Maryland and bought a home on the Delaware shore where he also set up shop.

Despite the housing slump and subprime collapse, Kronthal is cautiously optimistic about the future.

“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon t

Creative financing

That’s where the creativity comes in.

“It’s typical for the wife to have been out of the labor force for a couple of years and become a stay-at-home mom raising children, while the husband was the primary wage earner,” Kronthal said. “When the parties get divorced, the wife has to return to work and doesn’t have an employment history. So I go out and find products to accommodate her.

“That is where the no-doc loans come in,” he said. “The loan-to-value ratios are comfortable enough for lenders to lend to people re-entering the workforce — especially with a good credit history and credit score of more than 660 — sometimes less for different lenders.”

Limited-documentation and no-documentation mortgages once were used primarily by self-employed professionals, small business owners and individuals heavily dependent upon periodic bonuses or commissions, according to columnist Kenneth R. Harney.

In no-doc programs, applicants typically state their income and assets to the loan officer but are not required to show detailed proof of that information for the lender’s files.

Twenty-two percent of brokers in a recent study by Inside Mortgage Finance, reported low-doc clients had “divorce or other legal circumstances that complicated their financial profiles.”

Trading post

The trade-off for lenders is to be able to charge higher rates and compensation for the loan originator.

Kronthal made the move from divorce lawyer to loan officer three years ago when housing sales began to slump.

“I got into this business because I had handled so many divorce cases, and these kinds of actions were not uncommon,” he said. “And I didn’t think loan officers were giving my clients good financial advice.”

Kronthal and his family left Maryland and bought a home on the Delaware shore where he also set up shop.

Despite the housing slump and subprime collapse, Kronthal is cautiously optimistic about the future.

“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon t

In no-doc programs, applicants typically state their income and assets to the loan officer but are not required to show detailed proof of that information for the lender’s files.

Twenty-two percent of brokers in a recent study by Inside Mortgage Finance, reported low-doc clients had “divorce or other legal circumstances that complicated their financial profiles.”

Trading post

The trade-off for lenders is to be able to charge higher rates and compensation for the loan originator.

Kronthal made the move from divorce lawyer to loan officer three years ago when housing sales began to slump.

“I got into this business because I had handled so many divorce cases, and these kinds of actions were not uncommon,” he said. “And I didn’t think loan officers were giving my clients good financial advice.”

Kronthal and his family left Maryland and bought a home on the Delaware shore where he also set up shop.

Despite the housing slump and subprime collapse, Kronthal is cautiously optimistic about the future.

“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon t

“For a number of years mortgage professionals were not properly trained and lent borrowers mortgages they could not afford,” Kronthal said. “F rankly, I was aghast to see who was authorized to sell mortgages to people.

“Lenders were allowed to make loans to people who could not afford it,” he said. “That proved to be shortsighted and led to the continued appreciation in the real estate market.

“But after a 22-year run up in appreciation, property values were starting to revert,” Kronthal said. “And there is not as much room, now, to protect the lenders when there is a default.”

Nix on ARMs

Even before the subprime problem, Kronthal raised the red flag over a 10-year trend in adjustable-rate mortgages (ARMs).

More than 8 million adjustable-rate loans originated during the past three years, the National Association of Realtors (NAR) reported. Of those, 1.1 million loans totaling about $326 billion — are likely to end in foreclosure.

Kronthal agrees. While the initial terms of an ARMs mortgages look good on paper, all too soon the mortgage payments start to climb and soon homeowners are faced with the dreaded “f” word — foreclosure.

Despite the current crisis, Kronthal does not favor government regulation, believing instead, that “the only thing the industry can do is regulate itself.”

Of course, not all of Kronthal’s clients leave the negotiating table as satisfied customers.

“Sometimes, when couples find out how difficult it is to get divorced, they decide not to break up after all,” he said.