Tell me, is this common practice?

My wife and I are in the market for our first home. We are trying to qualify for a conventional loan and first time home buyers grant. Our mortgage broker wants my wife to sign away her interest in an inherited property that she owns jointly with several siblings. This home was acquired a year ago, and we have been living here for the past year.

The broker also wants us to get a letter signed stating that we had been paying rent for the past year. We were told it didn’t really matter who signed it, just do it.

Tell me, is this common practice?

Run away…fast and far.

<<The broker also wants us to get a letter signed stating that we had been paying rent for the past year. We were told it didn’t really matter who signed it, just do it. >>

Can you say “loan fraud”?

…and let’s see…your wife owns property with siblings (I would guess free and clear) but he wants her to sign away her interests…? What possible sense does that make? Did he say why?


Let me guess, you only qualify for the first time homebuyers program if your wife gets out of the other home, right? And, if your aren’t paying rent, then you must own something= redflag for lender…

Keith is right; run. There are other options.

That is right… and after asking twice I am told that this is our only option. Neither of us has a credit score. Though I am in my early 40’s and have purchased 4 vehicles on time payment previosly, this was more than 5 years ago. Neither of us use credit cards, and we have always rented. I understand how that may limit our options, but I’d be glad to know what other options are available.

There are always other options. The first would to be find another mortgage broker, preferrably one with a little more moral fiber.

You say that you paid for 4 vehicles? if it’s only been 5 years, then why isn’t that showing up on your credit? 7 years is the drop off date.

You don’t use credit cards? Then start. Each of you get one and use them to buy what you’d normally pay cash for, then pay them off every month. In about 3 months, you’ll have a good credit history.

Your car paid off? Refinance it, and use the cash to make the payments for 2-3 months, then pay it off (it’ll cost you 2-3 months in interest). Great payment history!

In short, if you don’t have a credit report, it’s your golden opportunity to create a stellar one.


You can sell your interest in real estate. (at least in Florida) You will not get full value, but it is better than the alternative.

You can do it even if the others choose not to.

Find a property where you can get owner financing. I assume you do not have bad credit, just no credit.
In most markets that are not on fire it is fairly easy to get owner financing if you just ask.

Good luck

The only reason he was being advsed to get rid of the property was so that they could more easily push him into a loan fraud situation claiming first time home owner.

Why would you sell a free and clear property out-of-hand on the advice of a Broker with no “moral fiber” (good term Raj!)…?


Good suggestions from all. I am a loan officer in Washington State and I know FHA allows 100% Financing for people with no credit. You get someone who is an FHA approved lender not all are becasue fo the above afformentioned tactics. They will ask you to use alternatvie trades like utility bill,cell phone,homeowners or auto insurance things that show you pay those bills are now widely accepted.
As far as grants go there are literally thousoands of differetn grants that don’t care if you have part ownership in another property. They may ask for a letter of intention of what you will do with the current property.
Hope that helps

Never Sign away anything, Find another Broker.