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New Moms Denied/Revoked Loans

Mortgage lenders are taking a harder look at prospective borrowers whose income has temporarily fallen while they are on leave, including new parents at home taking care of a baby. Even if a parent plans on returning to work within weeks, some lenders are balking at approving the loans.

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NightPhoenix

Asked by NightPhoenix at 12:56 PM on Jul. 31, 2010 in Politics & Current Events

Level 17 (4,668 Credits)
Answers (12)
  • NightPhoenix

    Comment by NightPhoenix (original poster) at 12:58 PM on Jul. 31, 2010

  • Everyone is suufering with this economy. The banks used to give loans out freely and that is how we got into the problems. We need to evaluate do we really need the loan or is there something else we could do?
    GoGreen6210

    Answer by GoGreen6210 at 1:04 PM on Jul. 31, 2010

  • I don't blame the banks--many of whom lost millions on defaults and foreclosures. If your income is questionable, and the ability to pay back your loan is in question, why shouldn't a bank, in THIS economy, be cautious?!

    Young couples who have young children or are expecting or planning a family should only be buying a home they can afford on ONE salary. Because it can be assumed that one parent will be home caring for said child/ren, or paying for daycare...which is going to affect one's ability to repay the loan. If you NEED both incomes in order to get the loan, then you are buying too much house!

    If I were to loan someone a significant amount of money, I would want to be absolutely certain that I can expect repayment within a reasonable amount of time!
    LoriKeet

    Answer by LoriKeet at 1:11 PM on Jul. 31, 2010

  • That woman from HUD sure is oversimplifying things. Not everyone gets paid maternity leave, not everyone is guaranteed a job back (only those who worked there long enough to qualify for FMLA), not everyone goes back to work, even if they originally intended to. Not to mention your debt to income ratio changes when you have a child and most people, even if they plan for it, don't really understand how much more money they'll be paying out. If someone is that close to qualifying or not qualifying that a month off work makes the loan company skittish, they weren't "extremely well qualified" to begin with.
    NotPanicking

    Answer by NotPanicking at 1:16 PM on Jul. 31, 2010

  • This isn't discrimination. IMO. It is logical and rational business based decision making.
    grlygrlz2

    Answer by grlygrlz2 at 1:28 PM on Jul. 31, 2010

  • I agree with all of the above. We are not ENTITLED to loans. You have to earn enough to warrant that much debt. Simple concept really.

    What was your question again?
    thundernlight

    Answer by thundernlight at 2:26 PM on Jul. 31, 2010

  • Ummm, yep. Just one of those pesky side effects of this recession and Obamas new financial reform law.
    itsmesteph11

    Answer by itsmesteph11 at 2:36 PM on Jul. 31, 2010

  • Let me see if I have this straight...
    The govt forces banks to make questionable loans..everybody deserves their own home..
    The banks get in trouble because people default on loans they couldn't afford to begin with..
    The govt bails out the banks with taxpayer money..
    The banks get cautious and don't want to make loans to people that may not be able to afford it..
    The govt is now shouting discrimination...

    For the love of Pete! Owning a home is not a RIGHT, it is a priviledge earned through hard work, responsible living and saving. It certainly isn't discrimination.
    yourspecialkid

    Answer by yourspecialkid at 4:16 PM on Jul. 31, 2010

  • How long have easy loans been available? like almost 16-18 years now? If you consider who might be in the populations of the people now requesting loans you will see it might primarily consist of people who were babies when a low risk conventional loan was the norm. Loans are not supposed to be easy to get...it just seemed that way for the masses because they lasted for so long and were available to virtually anyone and everyone. Sadly for the new young homeowner today...they will be the ones to return our economy back to where it should be. With hard to get credit cards and hard to get home loans and salaries that are in reason with their experience and education. Any risk in a potential loan will have to be considered even having a baby or having a job that doesn't pay maternity leave. A baby is a big expense...it should be considered in the applicants risk ratio.
    jewjewbee

    Answer by jewjewbee at 6:37 PM on Jul. 31, 2010

  • It is all DEBT TO INCOME RATIO that determines whether or not you get a loan. And ,of course, your credit rating which should be over 750--800.
    gertie41

    Answer by gertie41 at 9:04 PM on Jul. 31, 2010

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