One Kitchen Plus One Kitchen Equals No Kitchens...The New Math
I am working with a gentleman in a bit of a pickle. He has been living in his family home his whole life (over 40 years). 2 years ago, his mom had to go to a nursing home. My client's name was never put on the title. According to their Elder Care Attorney, because of the 5 year medicare look back, he will have to purchase the family home from his mother if he wanted to continue to live there. He spent a lot of time researching his options, then researching lenders, now he is up against the clock.
Our client had spoken to another lender, even locked with them (I found this out later), then met with my brother Tony and I. It's a small loan, not a lot of money in it, but I was very pleased when he chose us over the other lender because of:
- His comfort level with our services and responses to his many questions by phone and email.
- He liked our team approach. He liked that if one of us wasn't available, the other one was.
- Our proximity to his home (he lives in East Baltimore, our mortgage office is on the Baltimore City, Baltimore County Line)
Once I found out that he had locked with the other lender, I suggested that he continue that loan (he hadn't signed any loan docs yet). Even though the rate was better than we could offer (due to market volatility) he felt the other lender lacked continuity, there were too many hands in his file, and lack of a face to face option (they are in Virginia), he chose to move forward with us.
We had no challenges with the borrower, credit scores in the 800's, a debt to income ration BELOW 20%, assets galore, 20% down, conventional mortgage, urgency. A dream client!
We knew we had some challenges with the property. The family home was originally built as a 2 unit, but has been used as a single family property since the 1970's. We researched the zoning and determined that the property would be considered a one unit. Phew!
The appraisal came in slightly above the contract price. We thought we were in the clear.
Unfortunately, the property has two kitchens, one on the 2nd floor and one in the basement that is below-grade. The 2nd floor kitchen has had the stove removed, so was not considered a kitchen.
The underwriter reviewed the property, determined that the since below grade square footage is not considered in the gross living area, the kitchen (the one that has been used as a kitchen for over 40 years) does not exist, or really just can't be considered. The 3rd floor kitchen is not a kitchen because it had no stove so....we are in a pickle.
Tony is going to meet with our client at his home on Saturday morning to determine if the stove can be moved from the basement to the 2nd floor. I have a call in to another mortgage lender to determine if they can underwrite the loan if we can't resolve the issue in a satisfactory manner. We have researched the guidelines and can't find any that say that a below grade kitchen in a walk out can't be counted. We have a call into Fannie Mae, and now I am asking for your help.
Maryland Appraisers, Home Inspectors, Realtors, Any Suggestions??
Sure would love to be able to get this loan closed, I know that my client wants to stay in the home he has been in for so long. I know that his mom would have peace of mind knowing her son was able to buy the home since there is some guilt over not putting his name on the home years ago. It's not a big loan but it sure seems like...
One Kitchen Plus One Kitchen Equals No Kitchen...The New Math is not math that makes sense!
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