Legal Question in Real Estate Law in California

My elderly neighbor (English is not her first language) is in the process of buying a second home (for her brother who lost his home in foreclosure). BofA pre-approved her for $200,000. She found a home for $173,000 and has already paid for BofA's appraisal and their other fees. Today she was told by phone that new Federal regulations would limit her to a loan of $95,000. Supposedly this last-minute demand for so much more down payment than the original 20% is because there are brand new Federal regulations for first-time buyers of rental property and those regulations will not allow her to include the rental money she will receive from her brother as income to qualify for the originally approved loan amount. (She had expected to close this week and recently had been assured all was going well.)

I went with her to BofA to speak to the banker and to get a regulation cite, but we were told he had just left the building. We made an appointment for next week, but I would like to read the new regulations in advance, if they exist. Thank you.


Asked on 11/19/10, 6:07 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

There may be a misunderstanding here. The only reference to $95,000 I find in recent lending rules is that the first-time homebuyer's incentive program was limited to individuals with income of under $95,000. I did not find any other reference to $95,000 in the regulations.

Read more
Answered on 11/26/10, 12:59 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in California