With no-down loans long gone, many buyers turn to family for help with the upfront cash.

(Source: Washington Post)

 Real estate agent Brandon Green had a buyer lined up for a one-bedroom co-op he recently listed in a trendy Adams Morgan building. But two days before closing, the lender requested that the buyer come up with $9,000 more in cash.

Green got worried. His seller panicked.

But the buyer found a solution: She called her grandfather, who wired the additional money just before settlement. 

“Everything is surprising in banks these days,” said Green, principal broker of Brandon Green & Associates. “We have seen a dramatic increase in the number of parental-assistance purchases.”

Not long ago, it was possible to a buy a house with little or no cash. But those no-down-payment mortgages were among the risky loans that helped cause the current financial crisis as overextended purchasers began defaulting. As a consequence, banks have tightened underwriting standards and require more money down. That has pushed many buyers in search of cash to turn to what some used to see as the lender of last resort: their families.

Read Ylan Q. Mui’s full article “The Bank of Mom & Dad” in the Washington Post (April 2, 2009).

Also read: “The Bank of Mom and Dad” New York Times, April 20 2006.

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