Some home purchases put on hold due to COVID-19 unemployment crisis

LOMBARD, Ill. (WLS) -- For many people, buying a home is part of the American Dream. But one local couple's dream was nearly shattered because of the COVID-19 crisis.

The couple was just days away from finally closing on their new home. But when the wife was furloughed from her job, they were told they could no longer close, so they called the I-Team for help.

Lindsey and Robby Schmehil and their two boys were preparing to make a big move, leaving their small, two-bedroom apartment for a newly-constructed townhome in Lombard.

"It's actually just a mile away so we walk there almost every day," said Robby.

But last month when people in the state of Illinois were ordered to shelter-in-place, Lindsey was furloughed by her salon just a few days before they were set to close on their home.

"Called the lender. They let us know that, unfortunately, there's nothing we could do. We're still able to close with just your income, but the cost to close is substantial if I'm the only one on the mortgage," Robby said.

With only Robby working, the couple was told his debt-to-income ratio would have to be reduced, which would mean paying off thousands of dollars in debt.

"Because I'm out of work, we can't close now," Lindsey said. "It's just very defeating."

"They already rented out our apartment and we have to be out of here May 4," Robby said. "I don't know what else we can do."

Brian Saloman, vice president of mortgage lending at Blueleaf Lending, said situations like this are happening across the industry.

"You do all this work to get to the finish line, and the finish line is closing, and all of a sudden you can't close on your home because you lost your job due to a virus. It's really a difficult situation," Saloman said.

But Saloman said there are some options lenders can explore with their clients if someone loses their job.

"So if you have two borrowers and one income now, a couple options I would have them look at is maybe instead of putting down 20 percent, put down 10 percent and then use that difference to pay down some of your other revolving debt like an auto loan, credit card payments," he said.

With this option, you'd have to take out private mortgage insurance, which could be paid over time.

He said you can also see if a relative or close friend is willing to co-sign and down the road, you can refinance and have them taken off the loan.

"You have to look at this from every angle and different options," Saloman said. "There really are ways we can make this work."

It's encouraging news for this family of four, who refuse to give up on their dream of moving into the Lombard home.

"Everything will work out. Everything will work out. It may just take a little more time than we anticipated," said Lindsey.

"There's light at the end of the tunnel...hopefully," said Robby.

After our interview, the family went back to their lender to see if there were any other options.

They said the lender called and informed them they found a solution: They'll be able to pay a smaller down payment on their home to help reduce their debt to income ratio, so in this case, problem solved.
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