Saturday, June 20, 2009

Job transfers may be complicated by mortgage mess, esp. when there is a "trailing spouse"


Corporate transfers may slow down for other reasons besides the job market. Mortgage lenders are much less willing to give qualification credit for “trailing co-borrowers”, usually spouses, unless they also have secure jobs in new locations.

Fannie Mae now gives now credit; Freddie Mac has complicated rules, allowing 1/3 of total qualifying income, but not allowing self-employment (that probably means blogging, even if you’re someone successful like Heather Armstrong), requiring employment at the same place for two years (uncertain what happens with IT contractors employed by staffing companies), and evaluating the job marketability of the trailing spouse in the new area.

These problems could reduce opportunities for job retention, as in many cases after a merger or downsizing, employees who are willing to relocate are more likely to be retained. In fact, there is an art of selling yourself to the acquiring company – which may be impressed by an associate’s eagerness even though the interviewing and travel occurs on the acquiring company’s dime. I have seen this happen myself – acquiring employers love to see this kind of flexibility and interest in the new organization from “acquired” employees. I took advantage of this myself when I relocated to Minneapolis in 1997. It was one of the smoothest transitions in my career.

The Washington Post story appeared in the Real Estate section today, Saturday June 20, p E1, in a column called “The Nation’s Housing” by Kenneth R. Harney, “Getting Transferred? Securing a Mortgage Could Be Harder,” link here.

There is even one more wrinkle to this story. It seems that mortgage underwriters (especially those at Freddie Mac) will have a lot of discretionary authority, a situation that can invite “conflict of interest” and other business ethics problems that I have written about a lot before.

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