Two Stories

Written by Posted On Thursday, 08 February 2024 00:00

Let me tell  you a couple of stories that you absolutely won’t believe.

A very young couple who had just got married, figured the next step is to buy their first home. The husband had just graduated from college and is now working as an accountant. He worked hard, made good grades and all that. In fact, it was in college where he met his bride. His job paid well and he was happily married. Not a bad combo. The bride had also just graduated and was going to be an elementary school teacher this next fall.

So the husband made an appointment with a loan officer at his bank. They were both scheduled to meet at the bank in two days. They were excited. They even had a couple of houses picked up and felt comfortable with the proposed monthly payment their banker had calculated for them. The payment was just a bit higher than what they were paying in rent but with both incomes they could qualify, without her income, they couldn’t.

Anyway, they put on their best business dress clothes and headed to the appointment on the day of their meeting. They sat in a waiting area for a few minutes until their banker came to meet them.

“Sit down” he said. They both took a seat. The banker guided them through a loan application and after reviewing, he said they could qualify based upon their income. But he said that he wouldn’t approve the loan.

“Why?” they both said together.

“Because, your wife is of child-bearing age and if she became pregnant she would have to quit her job and without that additional income, I’m afraid there’s just not enough money available for a new mortgage.”

Stunned and disappointed, they got up and walked away.

Another couple was on the opposite side of the age category. They were both retired and approaching their 80’s. They too made an appointment and started toward the bank. They completed all their paperwork and even though they had some income, it was all from social security. However, their social security income was more than enough to move forward and buy the home they were downsizing to.

“I’m sorry,” said the banker. “I’m afraid our bank can’t move forward with your loan application.”

“Why?” they both said together.

“Because due to your age, there’s no way you’ll live long enough to pay off a 30 year mortgage.”

Stunned and disappointed, they got up and walked away.

These were both true stories, the difference is this was many years ago before age discrimination laws were put in place. The bank could pretty much do anything it wanted to in both instances.

Today however, if this happened in a bank, or with any lending institution, they’d get their proverbial pants sued all the way to kingdom come.

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David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

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