Buying a home is stressful enough without unexpected surprises, but one of my recent Lake Arrowhead transactions proved that even the “perfect” buyers can hit a roadblock.
My clients were first-time homebuyers with credit scores above 800, stable careers and plenty of funds. By all measures, they were ideal candidates for financing.
Everything moved smoothly – until about three weeks into escrow, when the lender suddenly began dragging its feet. Despite full pre-approval, the loan failed underwriting review with Freddie Mac. The reason? One buyer’s occupation wasn’t legal in all 50 states.
Yes, you read that correctly. Certain industries are lawful in California but restricted elsewhere, and that can create problems when a loan is being sold to national entities like Freddie Mac. Occupations in cannabis, gambling and some adult industries are examples where state-by-state legality complicates financing. Even ride-share drivers or small healthcare providers can fall into gray areas depending on licensing and state laws.
In this case, the loan could be restructured through Fannie Mae, which doesn’t currently impose the same employment restrictions. But the catch was significant: The buyer had to prove he wasn’t an owner in the business. That meant providing not only tax returns but also the employer’s Articles of Incorporation – an unusual and awkward request to take to one’s HR department. Underwriting combed through every detail, verifying he’d never had an ownership stake.
Imagine the stress of jumping through those hoops while trying to close on your first home. Yet with persistence and patience, we got it done. My buyers are now proud Lake Arrowhead homeowners.
The lesson? When filling out a mortgage application, be very clear about your employment type, especially if you work in an industry with state-by-state differences in legality or regulation. And when hiring a Realtor, choose someone who will stick with you through unexpected hurdles rather than walking away when the deal gets complicated.
Homebuying is never one-size-fits-all. Sometimes, even your job title can make the difference between closing day joy and last-minute heartbreak.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs and the surrounding mountain communities. Reach her at (909) 442-1345, visit www.HomesInLakeArrowhead.com and follow her on social media, @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
0 Comments