Bob called wanting to look at a small house (about 900 sq ft) we had for rent/sale near the University of Louisville.  The house appealed to Bob because he could see from the outside that this house had been beautifully updated and well cared for.   In qualifying Bob as a renter for the house, he told us that he was 46 years old, had been on his job for 16 years, earned in excess of $60,000/year and that he had lived continuously in the same apartment for the past 2 years, paid his rent on time, was unmarried, had no children, and had $41,000 in his bank account.  When asked why he wanted to move, Bob told us that the 1 room apartment was no longer suitable for him because he would be bringing his elderly mother to live with him and needed more room.  Bob was an ideal renter candidate, provided the information he had given us was accurate (and so often it is not). 

But why was Bob renting and not purchasing?  Bob told us how he’d been single most his life, had always owned his own home and never had any debt.  He had 1 credit card which he paid down to $0 every month.  (A quick check while we were on the phone together revealed that Bob had purchased a home 15 years earlier for $160,000). 

Bob said that he’d met the love of his life 3 years earlier and they'd married.  Wife thought they needed a larger home, which, with their combined income, they could afford.  They sold Bob’s home and purchased a $220,000 home.  Wife immediately began having a grand old time with Bob’s credit, income and cash.  Within 6 months, she had accumulated 7 credit cards and $50,000 in credit card debt.  Luxury items filled every nook and cranny of their new home. Despite Bob's efforts to reign in her impulsive, extravagant spending sprees, they continued unabated.

Bob filed for divorce and moved from the new family home into a 1 room apartment.  Wife refused to contribute towards the mortgage so Bob kept the payments current as long as he could, but ultimately it was too much for him alone.  Wife refused to sell the house, but she refused and remained in the home until it was foreclosed upon 1 year later.  Bob told us that he’d been paying off all of the marital debt for the previous 1 ½ years and that he was again debt free, living in his small studio apartment.  He also shared that he’d recently gone to his financial institution, where he’d banked for 25 years, but had been turned down for a mortgage because of the foreclosure and that he’d have to wait another year before they would consider lending to him.

We advised Bob that, given the extenuating circumstances, we may be able to get him a loan through a small local financial institution we worked with, L&N Federal Credit Union.  Bob felt that would be impossible because they are the ones who had just turned him down.  We nevertheless asked Bob to sign an authorization for L & N to speak to us.  We met with the L & N's Vice President and asked that Bob not be run through the loan computer program, which because of the recent foreclosure would exclude Bob as a borrower, but to look at Bob’s entire L & N account history, review Bob’s handling of his account along with all other credit, including the $50,000 credit card debt that Bob successfully paid off and closed over the last 18 months.

After careful scrutiny and consideration, L & N loaned Bob $110,000 towards the $150,000 purchase of a beautiful new home.  Bob's brother, a life-long renter, heard of Bob's success, came to us, and he too is now the owner of a new home.