Remembering the good old home loan days
Theres an old country-western song called In the Good Old Days, When Times Were Bad. I think about that refrain now, when the media tells us how hard it is to get a home loan as a result of the world financial collapse.I started working in the mortgage lending business in 1961. Let me tell you what getting a mortgage was like in those Good Times (I assure you, the following is true):In most cases, a wifes income could not be counted towards qualifying for a home loan. The only instance in which it could was if the couple could provide medical evidence of sterility for the husband or wife. This was because it was assumed a working wife could get pregnant, be forced to quit work, and the property would go into foreclosure.This was a hard and fast underwriting guideline, and it wasnt one just promulgated by pompous banking poobahs, but right out of FHA and VA manuals.In 47 years in the mortgage business, Ive personally never seen a loan go delinquent because somebody had a baby. Indeed, the motivation to preserve the home increases in that circumstance.Single women, almost universally, could not qualify for a home loan. Until the middle 70s the only instance I remember working on wherein an unmarried woman was able to borrow to buy a home was a 50-year-old practicing psychiatrist. Note the borrowers age; it was assumed she was too old to have children, even if she decided to get married.It wasnt a slam dunk for single men to qualify either, especially if they were young, say in their 20s. Im not really sure what the thinking was here. But, after all, young guys have wild parties, and tend to spend their money on booze and wild women, as we all know. But, of course, those wild bimbos couldnt get loans, either.If you didnt qualify for a VA loan, or your property for an FHA loan, you went to a savings and loan, where you had to have at least 20 percent of the purchase price to put down. There was no private mortgage insurance or high ratio conventional loans.Only World War II and Korean Conflict veterans were eligible for VA loans.Cash out, first mortgage refinances were virtually impossible to get, unless you belonged to the same country club as the S&L president.FHA and VA interest rates were fixed by law, so to respond to money market fluctuations, loans had to be discounted, with the seller paying the discount. Older properties were discriminated against, with discounts as high as 10 percent.And, of course, women were universally discriminated against in the work place. My first job out of the Marine Corps was as a loan processor for a mortgage company. In my job interview, I was told women were started at $50 less per month than guys.Doesnt sound like much? Well, my starting wage was a princely $350 per month.Im going to have to stop now. Im getting misty-eyed.Ah, the good old days.Pat Dalrymple is a valley native. Hes been in the mortgage and banking business since 1961. Hell be happy to answer your questions or hear your comments. His e-mail is firstname.lastname@example.org.
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