1n Home Loans, Subprime Fades as a Dirty Word

When no bank would give them a mortgage, Martin and Cindy Arroyo bought their home in Los Gatos, Calif., with a subprime loan from Athas Capital. By SHAILA DEWAN June 28, 2014

CALABASAS, Calif. — Martin and Cindy Arroyo knew they were not ideal candidates for a home loan.

She had gone through a foreclosure after losing her job, and he was finishing his M.B.A. and had not yet found his current position. But they had managed to put together a down payment of more than $550,000, or three-quarters of the asking price for a four-bedroom house in Los Gatos, and thought they would find a bank willing to lend the rest. They didn't.

So the Arroyos found an alternative: a subprime mortgage.

Despite the notoriety that subprime loans gained as a prime cause of the financial crisis, they are re-emerging, under much more careful control, as one answer to the tight lending standards that have shut out millions of would-be homeowners.

Brian O'Shaughnessy, chief executive of the Athas Capital Group.

"We call it the sane subprime," said Brian O'Shaughnessy, chief executive of the Athas Capital Group, which gave the Arroyos their loan.

Subprime loans, which accounted for about 15 percent of all new home loans in 2005 and 2006, are now a tiny sliver of the mortgage market. Only a handful of lenders are offering them, at interest rates from 8 to 13 percent (compared with about 4 percent for conventional loans to highly rated borrowers).

Mr. O'Shaughnessy said his underwriting standards, while more flexible, are tougher in some cases than those of the Federal Housing Administration, which permits down payments as small as 3.5 percent. According to the Athas rate sheet, borrowers with low credit scores, between 550 and 600, must put at least 35 percent down and will get an interest rate ranging from 8.99 to 12.99 percent.

Subprime loans have a thoroughly unsavory reputation — for good reason. But the loans started out with a legitimate purpose: giving people with less-than-stellar credit the ability to buy a home, as long as they paid a premium to compensate for the higher risk.

Traditionally, any loan to someone with a credit score below about 640 (the highest possible score is 850) has been considered subprime. During the housing bubble, when lenders were hungry for loans to package into securities for resale, the subprime label expanded to describe all manner of schemes, including loans with low or no down payments, "liar loans" with no proof of income and loans with a monthly payment so low that the principal actually increased over time.

Those exotic products are now virtually extinct. Governed by an encyclopedia's worth of new regulations, Athas's loans generally require down payments of at least 20 percent and documentation of income or assets, as well as an assessment of the borrower's ability to make the payments. Athas does not offer teaser rates, pick-a-payment options or interest-only payments. But it does offer loans to people whose records are marred by a recent foreclosure or who lack a steady income.

And it is doing just what many economists and consumer groups have urged: making credit more widely available. "Not all subprime lending is abusive. It just happened that all of the abuses happened in the subprime space," said Nikitra Bailey, an executive vice president of the Center for Responsible Lending. "The regulators now have to be really vigilant to make sure people are getting appropriate loans and they don't allow the subprime market to get back out of hand."

Marketed by some lenders as "second-chance mortgages," only about 0.5 percent of new home loans are subprime today, according to Black Knight Financial Services, a research firm for lenders. That is not enough to bundle into securities for sale to investors, which means the lenders, largely financed by private investors, are for the most part keeping the loans on their books or selling them one by one, an incentive to keep the quality high.

But the lenders say it is only a matter of time before the market for subprime-mortgage-backed securities rebounds.

According to mortgage data from Zillow, the number of lenders responding to inquiries from subprime borrowers started to catch up to the number responding to prime borrowers beginning in the fourth quarter of last year. Large banks are also looking at subprime borrowers because rising mortgage rates have killed off much of their refinancing business. In February, Wells Fargo announced that it would lower the minimum credit score for a home loan to 600, from 640.

More than 12.5 million people who might have qualified for a home loan before the crash have been shut out of the market, Mark Zandi, the chief economist for Moody's Analytics, estimates. Members of minority groups have especially suffered; blacks and Hispanics are rejected by mortgage lenders far more often than whites.

Despite the new regulations, there is much that is familiar about the new subprime lenders. Athas is based in Calabasas, the Southern California city that was once the home of perhaps the most infamous subprime lender, Countrywide Financial. Athas's chief competitor, the Citadel Servicing Corporation, is in Orange County, another onetime hotbed of subprime lenders.

Many of the players are the same, too. Mr. O'Shaughnessy met his partner, Alim Kassam, during the bankruptcy of Quality Home Loans, which had bought Mr. O'Shaughnessy's previous company, Bankers Express Mortgage.

But the vocabulary has changed. Because new federal regulations have created something called a qualified mortgage, or Q.M., which must conform to strict requirements, future lending is likely to be categorized as Q.M. or non-Q.M. rather than prime or subprime. Non-Q.M. lenders will have both more flexibility and more liability, but not all non-Q.M. loans will be subprime.

Among the lenders preparing to make non-Q.M. loans is New Leaf Lending, a division of the Skyline Financial Corporation, based in Calabasas and run by William D. Dallas. In 2007, Mr. Dallas was a subprime lender who told The New York Times that investors had pushed him to make risky loans. "The market is paying me to do a no-income-verification loan more than it is paying me to do the full-documentation loans," he said. "What would you do?"

Now, he says, the pendulum has swung too far the other way. "If you're self-employed, you're hosed," Mr. Dallas said. "If you just started a job, you're hosed. If you get a bonus, you're hosed. Just got a severance payment? Can't count that. I don't have to do a lot to be a lender. I just have to be normal." Banks have forgotten that loans are collateralized by the home itself, he said.

In the case of the Arroyos, for example, the house would have to lose 75 percent of its value for the lender to be at risk. "They just have a formula, and they decide whether or not you qualify without looking at what's logical," Ms. Arroyo said of conventional mortgage lenders.

Some employees of conventional banks might agree. Barry Boston, for example, recently left one of those banks for a job at Athas, frustrated by having to turn down so many perfectly fine borrowers and because of the endless paperwork involved in closing a loan. "I couldn't stand it anymore," he said. "The wind had been completely sucked out of my sails."

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Stung by Supreme Court, Aereo Suspends Service

Video | What the Aereo Decision Means for TV The Supreme Court ruled that Aereo violated copyright law, granting television networks a much-desired win that will preserve the status quo — at least for now. By EMILY STEEL June 28, 2014

Aereo, the start-up firm that threatened to upend the television industry, has hit the pause button.

Three days after the Supreme Court ruled that Aereo had violated copyright laws by capturing broadcast signals on miniature antennas and transmitting them to subscribers for a fee, the company suspended its service.

"We have decided to pause our operations temporarily as we consult with the court and map out our next steps," Chet Kanojia, Aereo's chief executive, said in a letter to customers sent on Saturday morning under the heading "Standing Together for Innovation, Progress and Technology."

Aereo said that the service would not be available after 11:30 a.m. on Saturday and that it would give users a refund for their last paid month. The company had fewer than 500,000 subscribers in about a dozen metropolitan areas.

Graphic | ABC v. Aereo

Customers paid $8 to $12 a month to rent one of Aereo's dime-size antennas that captured over-the-air television signals. They then could stream and record programs from major broadcasters using their mobile phones, tablets, laptops and Internet-connected televisions.

In a 6-to-3 decision issued on Wednesday, the Supreme Court sided with broadcasters in a case that was closely watched by the media and technology industries. The ruling comes as the foundation of the media business undergoes vast change reflecting a rush of new technologies and a rising number of consumers who are abandoning traditional pay-television subscriptions.

Aereo challenged the economics of the television business. Broadcasters worried that had the start-up triumphed, it would have threatened the billions of dollars they received from cable and satellite companies in retransmission fees.

Broadcasters argued that Aereo's business model violated copyright laws and was a high-tech way to steal their programs. Aereo countered that its service was a digital-age solution for watching free over-the-air broadcasting.

Document | Supreme Court Decision in Aereo Case Citing copyright law, the justices rejected the streaming service's model of capturing broadcast signals and delivering them to subscribers.

The case was sent back to a lower court. Analysts and legal experts said it would be nearly impossible for Aereo to continue with its current business model.

Before the decision, Aereo, which was founded in 2012, said that it had "no Plan B" if it lost in court.

But on Saturday, Mr. Kanojia said Aereo's journey was "far from done." A spokeswoman underscored that the company was not shutting down, merely temporarily stopping its service.

"The spectrum that the broadcasters use to transmit over-the-air programming belongs to the American public, and we believe you should have a right to access that live programming whether your antenna sits on the roof of your home, on top of your television or in the cloud," Mr. Kanojia said in his letter to Aereo users.

Mr. Kanojia quoted Charles F. Kettering, an American engineer whose inventions were essential to the creation of the modern automobile: "The world hates change, yet it is the only thing that has brought progress."

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Rollin King, Who Helped Start Southwest Airlines, 1s Dead at 83

By MICHAEL CORKERY June 28, 2014

Rollin W. King, a co-founder of Southwest Airlines, the low-cost carrier that helped to change the way Americans travel, died Thursday in Dallas. He was 83. The cause was complications from a stroke he had a year ago, his son Edward King of Dallas said.

An avid pilot, who had a business degree from Harvard, Mr. King sketched out a plan to create Southwest in 1967. The idea was to create an airline that was less expensive and more fun to fly.

"He really had a feeling there was a better way to go about air travel," his son said.

Back when Mr. King and his lawyer at the time, Herbert D. Kelleher, started the company with just a few planes, Southwest faced stiff opposition from larger, established carriers, whose prices made frequent air travel the near-exclusive domain of the wealthy.

The company started flying in 1971, but only in Texas at first. Southwest is now one of the world's largest airlines with more than 100 million passengers annually and $17.7 billion in revenue last year.

"His idea to create a low-cost, low-fare, better service quality airline in Texas subsequently proved to be an empirical role model for not only the U.S. as a whole but, ultimately, for all of the world's inhabited continents," said Mr. Kelleher, Southwest's co-founder and chairman emeritus.

Southwest's chief executive, Gary C. Kelly, credited Mr. King for helping to start the company's effort to "democratize the skies."

After helping Mr. Kelleher get the airline off the ground, Mr. King liked to pitch in as a pilot on some of the company's routes, his son said. Mr. King was the company's first president and served on the company's board of directors until 2005.

Born in Cleveland, Ohio, Mr. King graduated from Case Western Reserve University and Harvard Business School. After earning his business degree, he moved to San Antonio, took as job as an investment banker and operated a charter airline.

Among his survivors are another son, Rollin Jr. and a sister.

The concept for Southwest came to Mr. King when he noticed that businessmen in Texas were willing to charter planes instead of paying the high fares of the domestic airlines.

When Mr. King first proposed the idea to Mr. Kelleher over drinks, the federal government regulated the fares, schedules and routes of interstate airlines, and the mandated prices were high.

Competitors like Texas International Airlines, Braniff International Airways and Continental Airlines waged a four-year legal battle before Southwest could make its first flight. By not flying across state borders, Southwest was able to get around prices set by the Civil Aeronautics Board.

To compete in those early years, Southwest gave out free bottles of liquor to passengers who bought full-fare tickets. The early uniforms of the Southwest female flight attendants also stood out — orange shorts, known as "hot pants," with high white shoes.

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DealBook: Prosecutors Seek Sentence of at Least 8 Years for Mathew Martoma in 1nsider Trading Case

Andrew Kelly/ReutersMathew Martoma, a former trader with the hedge fund SAC Capital Advisors, was convicted of securities fraud.

Federal prosecutors are recommending that Mathew Martoma, a former trader who worked for the billionaire investor Steven A. Cohen, be sentenced next month to at least eight years in prison for insider trading, if not significantly more.

That would be at the upper end of prison sentences for hedge fund traders convicted of insider trading in recent years, but by no means the stiffest punishment handed down during the long-running investigation.

Prosecutors for Preet Bharara, the United States attorney in Manhattan, did not call for an exact sentence in a court filing on Friday. But prosecutors said the severity of Mr. Martoma's crime warranted a sentence above the eight years recommended by the federal court's probation department.

In February, a federal jury in Manhattan convicted the former SAC portfolio manager of helping the hedge fund generate profits and avoid losses totaling $275 million in 2008. Mr. Martoma is one of eight people who once worked at SAC to either be convicted of or plead guilty to insider trading.

Mr. Cohen renamed his firm Point72 Asset Management in April, just days before a federal judge accepted SAC's guilty plea on insider trading charges. The former hedge manager agreed to pay a $1.2 billion penalty to federal prosecutors and more than $600 million in fines and restitution to securities regulators.

Mr. Martoma, 40, a married father of three young children who worked for Mr. Cohen for just four years, potentially could receive the stiffest sentence yet in the federal government's multiyear crackdown on insider trading in the $3 trillion hedge fund industry. Based on the charges on which he was convicted, Mr. Martoma could, in theory, be sentenced to as many as 20 years in prison.

To date, the 11 years given to Raj Rajaratnam, the co-founder of the Galleon Group hedge fund, is the longest sentence anyone in the investigation has received. Mr. Rajaratnam was convicted by a jury in May 2011 on 14 counts of insider trading — more than Mr. Martoma's three criminal charges. But the illicit trading by Mr. Rajartnam generated about $63 million, compared with the $275 million in illegal profits and avoided losses for Mr. Martoma.

Prosecutors said a stiff sentence was needed to reflect the gravity of the illegal trading conducted by Mr. Martoma. In the filing, prosecutors also noted that Mr. Martoma had been expelled from Harvard Law School for altering his law school transcript.

Judge Paul G. Gardephe of the United States District Court in Manhattan is scheduled to impose a sentence on Mr. Martoma on July 28.

In a filing last month by Mr. Martoma, his lawyer asked the judge for leniency, but did not recommend a sentence. The lawyer, Richard Strassberg, said the "probation department is recommending a sentencing guideline" that is "outrageous," noting that the United States sentencing guidelines called for a minimum of 15 years.

The probation department, in its final report, which is not available to the public, recommended the eight-year sentence referenced in the filing on Friday.

Mr. Martoma's lawyer argued his client did not deserve a sentence as severe as the one handed down to Mr. Rajaratnam because he was not convicted of multiple counts of insider trading as the Galleon founder was.

The sentencing of Mr. Martoma is one of several unresolved matters in the investigation of Mr. Cohen and his firm. Still outstanding is an administrative failure-to-supervise case against Mr. Cohen filed by the Securities and Exchange Commission last July that has been delayed at the request of prosecutors.

Also, sentences must still be handed out to four former SAC employees who pleaded guilty to insider trading and cooperated with the investigation. One of those cooperators who has yet to be sentenced is Richard Choo-Beng Lee, a former hedge fund manager who worked for Mr. Cohen from 1999 to 2004.

Defense lawyers have said that until all the cooperating witnesses are sentenced, there remains the possibility that prosecutors may still pursue charges against others who worked for Mr. Cohen. But a person briefed on the investigation said that the inquiry was winding down and that a criminal prosecution of Mr. Cohen was unlikely.

A spokesman for Mr. Cohen declined to comment.

For now, Mr. Cohen appears focused on keeping crucial employees from departing. About 850 work at Point72, down from about 1,000 employees a year ago when SAC was managing over $14 billion in assets.

On Friday, the S.E.C. issued an administrative order giving SAC until the end of next year to fully wind down its operations and dispose of about $623 million in hard-to-sell assets that were left after the hedge fund returned up to $5 billion to outside investors.

A version of this article appears in print on 06/28/2014, on page B7 of the NewYork edition with the headline: Prosecutors Ask at Least 8 Years for Martoma in Insider Trading Case.
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General Motors 1ssues 3 More Recalls Covering 474,000 Vehicles

By THE ASSOCIATED PRESS June 27, 2014

DETROIT — General Motors says it's recalling another 474,000 vehicles worldwide including new pickup trucks and SUVs for a transmission problem.

It's the 48th recall for the company so far this year, covering more than 20 million vehicles.

GM announced three recalls late Friday. The largest covers almost 467,000 four-wheel-drive Chevrolet Silverado and GMC Sierra pickups, as well as GMC Yukon and Chevrolet Tahoe and Suburban SUVs.

The company says the transmissions can shift into neutral on their own. That can cause loss of power or it can let the trucks roll away if parked. GM says it knows of no crashes or injuries.

The other recalls are much smaller. One covers the Chevrolet SS and Caprice police cars for windshield wipers. The other covers Chevy Corvettes with defective rear shock absorbers.

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As Panama Canal Expands, West Coast Ports Scramble to Keep Big Ships

The Port of Tacoma is determined to keep up its rich import business, which can be traced to the 1880s. By DIONNE SEARCEY June 27, 2014

TACOMA, Wash. — As construction crews 5,000 miles away are working to widen the Panama Canal to allow much larger ships to sail straight to the East Coast, this historic port city and others along the West Coast are doing everything they can to avoid becoming superfluous.

The Port of Tacoma is determined to keep up its rich import business, which can be traced to the 1880s when chests of tea from Asia arrived at its docks and headed to the East Coast by rail. Port officials know that by the time the Panama Canal opens in 2016, an even newer, larger fleet of cargo ships will be plying the oceans and will be so big they will not be able to squeeze through even the wider channel.

So Tacoma, Seattle and other ports are spending billions to be ready to receive the ships and keep themselves competitive in the overall scramble for foreign trade.

"The ships continue to get bigger, the cranes need to get bigger, and the docks need to be able to handle them," said Trevor Thornsley, senior project manager for the Port of Tacoma, as he stood along the jagged rebar and broken concrete of a $22 million renovation to shore up the port's Pier 3.

The work in Tacoma, a major port in this state that likes to call itself the most trade-dependent in the nation, is among dozens of projects being completed in port cities across the United States in response to major changes in the world of container imports from Asia.

"Everybody in the supply chain from the manufacturer to the end consumer — that entire supply chain is changing," said Tay Yoshitani, chief executive of the Port of Seattle. "The port industry is trying to make adjustments."

Traditionally, America's West Coast ports have been the gateway to the rest of the country for the growing supply of goods from China and Hong Kong. The ports in Tacoma, Seattle, Oakland, Los Angeles, Long Beach and elsewhere offer much shorter sailing times than Gulf Coast and East Coast ports. But for shippers of some goods, the web of logistics, including trucks and railroads, ends up being less expensive if they go through the Panama Canal.

Even though the West Coast ports are viewing the project to widen the Panama Canal as a major threat, it may not be their biggest challenge, said John Martin, who works as an economic consultant for several ports.

Most imminently, officials at the West Coast ports are concerned about negotiations underway for a union contract, which expires on Tuesday and affects nearly 20,000 dockworkers at 29 ports. In 2002, during contract negotiations, talks broke down and resulted in a bitter battle that shut down shipping along the West Coast for 10 days and sent cargo ships to other ports of call, some of them permanently.

Craig Merrilees, a spokesman for the International Longshore and Warehouse Union, said that contract talks were positive and on track. John Wolfe, the chief executive of the Port of Tacoma, said that while port officials did not have a role in the talks, he, too, was optimistic. "We've been down this road before," Mr. Wolfe said. "We're all in this together."

Besides the union concerns, ports are bracing for an onslaught of changes in the shipping world.

While the widened Panama Canal will allow an all-water route for big ships to the East Coast, the project — originally scheduled to open this year — has been plagued with construction delays. And the authorities have yet to announce toll charges for passing ships. In the end, it might be too expensive for some ships to use.

It is also possible that railroads that move goods from West Coast ports could lower fees to make it more economical for ships to avoid the Panama Canal route.

"The uncertainty as to what's going to happen with rates is huge," said Mr. Martin, the consultant, who is president of Martin Associates.

At the same time, sailing patterns may shift as Asian manufacturing continues to move from China to countries to the south, like Singapore and Vietnam, which are actually closer by sea to East Coast ports through the Suez Canal than to West Coast ports across the Pacific.

A new competitive threat has emerged 500 miles north of the United States border with Canada. Tacoma and Seattle are losing market share to the Port of Prince Rupert in British Columbia, just six years old and already doing brisk business with goods headed for the Midwest United States. While the port is nearly at capacity, the Canadian government continues to make major investments in it and is also pursuing a plan to build an export facility for liquefied natural gas that would tap a gas pipeline that is in the works.

For trade with China, Prince Rupert's appeal is proximity. Prince Rupert is two to three days closer than the western coast of the United States, helping ships cut fuel costs. Another major factor is that Canada's railroads are offering bargain rates to ship goods from Prince Rupert to Midwestern cities, analysts said. While the railways and truck lines in Canada have a history of labor instability, cargo carriers sailing into the country can avoid taxes levied by the United States government.

Here at the Port of Tacoma, the biggest threat in the past has been the port just 30 miles away in Seattle. The two ports have fought back and forth for decades over shipping business. But the new competition from Canada and elsewhere has brought an unusual alliance.

This year, the two ports for the first time sought permission from the Federal Maritime Commission to share information on operations and rates without violating federal antitrust laws. The ports now are coordinating lobbying tactics as well as construction projects to make sure they're not duplicating efforts, officials said, and are researching other ways to cooperate.

"In the past 60 years we've truly been cutthroat," said Stephanie Bowman, a commissioner for the Port of Seattle. "We've been able to work together and put aside our historical competition."

In Seattle, the port's facilities already have undergone $1.2 billion in upgrades through 2012 and plans have been approved for an additional $5 million to upgrade Terminal 5 to get ready for big ships. Tacoma's Pier 3 project will make it sturdy enough to handle the monster cranes needed to reach across wide berths and unload the big ships.

The expenditures are a gamble. No one knows for sure whether enough of the big ships will come to Seattle and Tacoma to offset the investments in the ports. But Steve Sewell, economic development director for Washington State's maritime industry, said the preparations were worth it.

"You have to make some investments," Mr. Sewell said, "and take some risks."

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Retiring: The Blow to Retirement Plans From a Late-in-Life Divorce

By CONSTANCE GUSTKE June 27, 2014

After enduring a divorce four years ago, Mike Miller's vision for a golden retirement got an unexpected makeover. Mr. Miller had been married for more than 30 years, and now he was single. His longtime dream of a shared retirement was shattered. He was also facing another unwelcome outcome: living in a smaller home and taking fewer vacations.

"The financial belt needed to be tightened," said Mr. Miller, now 61 and managing director of Integra Shield Financial Group in Minnesota. "It doesn't go around as well."

Like Mr. Miller, more Americans are going through so-called gray divorces and the downsizing that follows.

The divorce rate in the United States among people 50 or older has doubled since 1990, according to a study by the National Center for Family and Marriage Research at Bowling Green State University in Ohio. And as the American population steadily ages, gray divorces will keep rising: By 2030, it is estimated that 800,000 will occur annually.

Mike Miller, 61, had been married 30 years before enduring a divorce four years ago. 

Besides causing depression and dashing dreams, these divorces can sabotage retirement plans as assets are cut in half and expenses as a divorced single rise. For some older people, emerging from divorce with retirement plans intact can be challenging.

"There isn't much time left to enhance portfolios post-divorce," said Susan Brown, co-director of the National Center for Family and Marriage Research. "So you have to be careful to get the best settlement you can. Some people may have difficulty recovering." One solution, she added, is "having a really good attorney and fighting for your fair share."

Spouses over 50 often bring fat pensions and defined-contribution plans to the table, making some settlement fights especially ugly, experts say. But failing to battle for your share can cost hundreds of thousands of dollars more down the road, said Emily Widmann McBurney, a partner at Kegel McBurney in Atlanta. A lot of people are leaving money on the table by overlooking some of these assets, she added.

At the same time, newly divorcing couples may feel stress and depression, which can complicate decision-making. "One likely result is that people delay making important financial decisions," said Michal Ann Strahilevitz, professor of marketing and behavioral economics at Golden Gate University in San Francisco. "Very often the result is a downsized living standard." The key, she added, is making sure the divorce isn't an ugly one, which could make wise financial decisions even harder.

Mr. Miller agreed. He faced some of the same emotional drains juggling divorce and retirement planning. "Your focus isn't there," he says. "It's on a failed relationship and on being done with the process."

To avoid this emotional logjam and negotiate a better settlement, experts suggest hiring a financial planner even before finding a good divorce lawyer. These planners can help divorcing spouses navigate a maze of retirement plan laws, make cash-flow forecasts and maximize tax-free distributions.

This financial prowess is needed early in the battle over retirement nest eggs. The inventory of assets that couples make when disclosing their investments is one example. Sometimes, esoteric assets like deferred-compensation plans or stock options may be overlooked or misunderstood in the inventory, Ms. McBurney said. Or the highest-earning spouse may unknowingly forget some assets.

"Post-divorce, you may discover that an ex-spouse had a leftover pension from a job long ago or from military service," Ms. McBurney said. "Later, you may not be entitled to the income from those assets." Some people get around that, she said, by adding a clause to the divorce settlement agreement that says assets discovered later will be divided in half.

Fights are more contagious around retirement assets, Ms. McBurney said. She counsels that haste is a terrible mistake.

She suggests hiring forensic accountants or other experts, if you need them, to find additional assets, which may be hidden. "There's no do-over," she added.

Once on the inventory, defined-contribution plans and pensions offered by employers are usually divided by using court orders called qualified domestic relations orders, or Q.D.R.O.s. They may be included in the divorce settlement agreement that splits up retirement plan assets, said Louise Nixon, president of QDRO Counsel, a California firm that focuses on the division of retirement benefits.

But Ms. McBurney said it was important to make sure the orders were accurate and appropriate for your individual situation. Errors can be costly. Often the standard form used for administrative purposes by an employer will need to be modified by a lawyer to suit an individual settlement.

"Attorneys should know enough to read the Q.D.R.O. forms and adjust them," Ms. McBurney said. "The slightest word change can make all the difference."

Taxable issues can also reduce seemingly hefty retirement plan assets. Defined-benefit plans, for example, are usually taxable when a person receives the funds, said Tom Rowley, a director of retirement business strategy at Invesco Consulting. These assets aren't taxed, however, if they're put into another retirement account. So look at the taxes owed on an investment, he said.

Even alimony can be more complicated than it might seem at first. People forget that alimony is taxable, said Jeffrey Landers, a divorce financial strategist at Bedrock Divorce Advisors in New York. And retirement plan assets may be neglected in the battle for present income. "People don't think of streams of income 10 years from now," he said. "But they end up regretting it." Alimony is usually only a short-term income solution, since it typically ends after a former spouse dies.

Instead, people go after emotional assets like a house, Mr. Landers added, even though they may not be able to afford it. Or they just throw up their arms and want to move on, he said. "But you need to think of gray divorce as a business transaction," he said. "You need to crunch the numbers."

Social Security is one of the least-disputed retirement assets, but even it can be overlooked. When there's a significant disparity in an ex-spouse's income and yours, look into collecting half of the higher-earning ex-spouse's benefits, said Angela Deppe, founder of Social Security Central. There are some qualifications — being married for at least 10 years, for example — but many people don't realize they can be eligible, she said. Women typically collect their husband's benefits since they're usually higher, but she added that if you remarry, you may lose the ex-spouse's Social Security benefits.

As for moving on after divorce, Mr. Miller advocates building a life plan that lets you live the best life possible with your available resources. The plan should also be aligned with your purpose, meaning, values and principles. "Divorce woke me up to answering questions like 'What do I want my life to be?' " he explained.

The lesson in gray divorce, Mr. Miller said, is realizing that the ship isn't sinking. "You're just steering a new course."

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