February, 1998

Access To The Dream:
Mortgage Lending in Texas

Written by the Consumers Union Southwest Regional Office.
on behalf of the Texas Community Reinvestment Coalition

Ms. Beatrice Smith, a single mother with two children, and Mr. Alfredo Espinal, married with five kids, both applied for their first home loan through Guaranty Federal Savings Bank in Irving.

Mr. Espinal wanted a house because the size of his family always made it difficult to find an affordable apartment and to live comfortably there. Living for many years in apartments herself, Ms. Smith simply wanted her boys "to grow up with some of their years in a house."

They found Guaranty's application process time-consuming. Mr. Espinal remembered being asked repeatedly to submit additional information because his income could not be verified, although he presented paycheck stubs and income tax statements from several years back. Guaranty eventually denied Mr. Espinal a home loan because of insufficient information.

Similarly, Ms. Smith recalled, "I kept getting letters that they [Guaranty] needed more information, even though I continuously mailed copies of information in. I attended home-buyers classes and supplied information. It was never a question of not enough income or bad credit. It was always insufficient information.The loan was finally approved, but I had already gone with a mortgage company because of the length of time Guaranty took to process the loan."

"It was a very discouraging process. You get really excited about the dream of getting your own home and not having to live in an apartment anymore, just to get pushed further and further back. There were times when [I] wanted to pull out and say forget it-it's not worth it anymore," she said.

For both of these Guaranty customers, the loan process was time consuming and expensive. Mr. Espinal found it "difficult to continually save up for the down-payment without sacrificing other needs of the household." Ms. Smith noted, "[You are] spending money to get copies, traveling, not to mention saving for the down payment. Your whole life is on hold."

Mr. Espinal's home loan was approved through Summit Mortgage within two to three months, and First Nationwide Mortgage approved Ms. Smith for a home loan.

"We got to live in a house with a lot of great memories," Ms. Smith recalled finally. "And sometimes it's tough when you can't give that to your kids."