Bankers’ Hours column: A wife’s income could not be counted for a mortgage |

Bankers’ Hours column: A wife’s income could not be counted for a mortgage

There’s a child care crisis in the U.S., and it will have a significant effect on the economy. It almost certainly is not going to right itself, so the ramifications will permanently change how we live. More specifically, it could be that housing will see a shift across the board.

Queue up nostalgic music and travel back in time to 1961. I was fresh out of the service, and my first job was processing FHA and VA home loans. I worked for one of Denver’s top mortgage bankers, and it was a busy operation, so I might take five or six loan applications, and say that I took 25 apps in a given week. Out of that number, maybe two — and I’m sure never more than three — involved two incomes from husband and wife.

The reasons? First, there were far fewer women in the work force back then. And the ones that were working didn’t count for much. Underwriting and qualification guidelines for both FHA and VA stated that a wife’s income could not be counted in qualifying unless it was incontrovertibly proved that she could not have children — generally a verified statement from a physician.

Single women were not granted home loans. The only exception in my experience over three years in this job was a loan to a 51-year-old practicing psychiatrist.

And our family was able to experience this, more or less, on the other side of the table. My wife and I were married almost immediately after I finished Marine Corps infantry training. It was the best time in 150 years to be in the Corps if you didn’t want to get shot at, so we ended up spending close to three years in southern California. She promptly started looking for work, and was well qualified to do it, but was repeatedly turned down because her husband was in the military, and “these guys get transferred, you know.” She did find work and became a key employee in the business. But we had decided to have the birth of our first child to be covered by Uncle Sam, more specifically at the Camp Pendleton Naval Hospital. Her company’s policy was that pregnant women couldn’t work there, and her boss held out as long as he could but reluctantly had to fire her.

Today, all of these activities are statutorily illegal. If the event, or events, are egregious enough, you’re facing some very serious federal legal action and big monetary penalties.

Things began to change in about 1969, slowly at first, and then the snowball began tumbling downhill, culminating with the Equal Credit Opportunity Act of 1974. Suddenly, it seemed, the amount of disposable income available to buy a home had increased exponentially. More houses could be built, bigger homes could be bought. This helped make housing an integral part of the high points of the economy for the last 45 years.

A collapsing child care industry means that a lot of workers will not be generating disposable income for home purchases, some temporarily, some, possibly, permanently, albeit on a smaller scale than the great sea change in the early ’70s. I’m not an economist (and I don’t play one) but I have a hunch the effect could be significant economically and socially and even spark longer-term cultural changes. Maybe new homes will be smaller to accommodate lower family incomes. Possibly multifamily units will take on a dramatically more significant role in housing. We’ll see.

What? Oh, why wasn’t the wife’s income counted way back when? The theory was that if the wife got pregnant, she’d quit working, and the loan would immediately become delinquent. My regular readers (I believe there are three of you now) know from the way that I parse ancient history that I’ve been around the lending business for a long time. And I’ve never, ever, in all those years, seen a mortgage go into default because someone had a baby.

Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His email is


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