Brothers pool resources, clear hurdles to homeownership

Mortgage adviser: Rick Weber. Property type: Single-family home in El Sobrante. Price: $599,000. Loan amount: $578,035. Loan terms: FHA 30-year fixed at 4 percent. Backstory: Three brothers were working with Realtor Kimberly Gates at Alain Pinel Real Estate.

Gates located a home that met the buyers’ needs and showed it to them on a Saturday morning. The problem? Offers had to be presented that day at noon.

Kimberly contacted Rick Weber to see if he could get the buyers preapproved in time.

Weber sent an email to the borrowers about the documentation needed from them and asked them to complete an online loan application. The brothers responded promptly and Weber evaluated their qualification profile.

He quickly determined that income and credit issues, along with relatively low assets necessitated use of an FHA (Federal Housing Administration) loan with a 3.5 percent down payment. Weber wrote the preapproval letter and the offer was accepted.

As the formal approval process unfolded, a number of problems surfaced. The first brother looked to be solid at first, but when asked for current pay stubs, he disclosed that he had not been paid in several weeks. It was determined that a technical issue in his company’s payroll department had caused the problem. Weber obtained an explanation letter from the human resources department and proof that the client had been compensated retroactively for the missed paychecks. First problem solved.

The second brother had a credit issue on his credit report having to do with an ROTC educational loan. What initially looked like a late payment incident turned out to be a loan default. In order to move forward, Weber worked with the borrower and the student loan agency to set up a repayment schedule. This solution was accepted by the loan underwriter. Second problem solved.

The third brother is selfemployed in the catering industry. He worked for multiple companies, with no set schedule, and it was not possible to determine a reliable monthly income due to the variable nature of his work. Weber decided the best course of action was just to have the first two brothers on the loan since they were able to qualify independent of the third brother. Therefore, the third brother was on the title only.

As everything seemed to be coming together, another issue came up with the appraisal. The property had an old, somewhat dilapidated barn on the premises, which FHA guidelines would not permit. It would either have to be renovated or removed. After determining that removal of the structure could be done relatively quickly and inexpensively, the seller agreed to have the structure removed.

The end of the story is that the brothers’ loan closed. They are now happy owners of a great new home.

Rick Weber, Holmgren & Associates, (510) 433-8818, rick@mortgageholmgren.com.