SAN MARCOS, Calif. — Mortgage loan broker Yamila Ayad has been in business for nearly 20 years in San Marcos, located about 40 miles north of downtown San Diego. She's well established in a growing Hispanic marketplace, and her small, bustling office handles as many loans as some mid-sized credit unions–she closed nearly 50 loans per month in 2004, during the boom.

But what's interesting isn't who Ayad's customers are; instead, it's how she qualifies them for loans. Historically, as many as 90% of home loan applications that come across Ayad's desk have two or more unmarried, but related applicants, either as co-

borrowers or

co-signers.

Cultural traditions make it more common for Hispanic, Asian and other immigrant families to live under one roof together, or combine assets to purchase investments that will grow family wealth.

But it's not just immigrants who need multiple income sources in order to qualify for mortgage loans in California these days.

According to the California Association of Retailers, home prices in the Golden State have increased so much that only 25% of the state's population earns enough to qualify for an entry-level home. First-time California homebuyers paid a median price of $477,400 in 2006, which is 2.5 times the national median.

And, Ayad points out, too high to qualify for a traditional mortgage.

Many of Ayad's loans are funded by providers that participate in low-income FHA programs, but not all of her clients qualify. More and more, Ayad is working with clients who earn median wages or higher, but don't qualify for a half-million dollar mortgage loan.

Is Ayad on the cutting edge of a new trend in mortgage lending? If California property values hold, and they're expected to, she just might be…at least until wages catch up with home prices.

Jeff Harper, vice president of lending at $870 million Orange County's Credit Union, said he thinks he'll see a lot more multiple-applicant mortgages pass through his division in the future. The Santa Ana-based credit union has brought mortgage lending back in-house, and is a couple of years into an initiative to increase Hispanic membership and cater more to underserved markets.

Harper said the credit union has had difficulties making loans to first-time homebuyers due to affordability, even with $5 million earmarked for that purpose. Orange County has some of the highest home prices in the state, with a June 2007 median price of $645,000.

“We've only funded a few, and two or three of those were instances where a couple of families came together. We were able to qualify them that way, but they weren't what I would necessarily consider underserved,” Harper said. “People earning a typical median income can't afford to live in Orange County right now, so I think a lot of families, regardless of ethnicity, are considering that approach.”

American First Credit Union is a $680 million institution headquartered in nearby La Habra, and includes all of Orange County in its field of membership.

Vice President of Lending Carlos Miramontez said he's seeing more and more multiple-applicant mortgage loans from throughout his membership, although Hispanic homebuyers still comprise the majority.

“It's gotten to the point where it isn't even a unique scenario,” Miramontez said of homebuyers who pool their resources. “They're just people trying to buy a house, regardless of whether they are married, unmarried or family members.”

Miramontez agreed that economics has played a large role in the increased popularity of multiple-applicant home loans, adding that most nuclear families prefer to buy a home on their own, but if they can't qualify, consider a larger home they can share with family members as a viable Plan B.

“I see it a lot in my marketplace. I wouldn't say it's to the point where it's become the most common application, but incidents have definitely increased,” he said.

David Constantino, president and chief operating officer of Patrion Mortgage, a wholly-owned subsidiary of $900 million Altura Credit Union, said a significant percentage of his mortgage loans involve multiple applicants.

“I'm not going to say it's a lot, because I would consider that to be more than 50%. But, I know that we approve loans like this every single month,” Constantino said.

Altura's field of membership centers primarily in Riverside County, which is 41% Hispanic, according to 2006 state census figures. Constantino said that multiple applicant mortgage loans will continue to be popular in the Hispanic community, but said if interest rates continue to rise and housing values hold, such loans could gain popularity in all cultures.

“Plus, as investors change criteria for down payments, and if it becomes harder to qualify for financing, I could see that being a factor, too,” he said.

None of the men interviewed said they've had any problems with multiple borrower mortgages. The loans sell well on the secondary market, mortgage approval software includes plenty of spaces to enter multiple applicants, and examiners have found no exceptions when auditing the loans.

Justin Grove, associate director of external affairs for the NCUA, said his examiners haven't identified any problems with multiple applicant loans, but added that the agency doesn't really track the loans, either. The only issue that may be worth discussing is differences between co-borrowers and co-signers. Co-borrowers must live in the home; if one co-borrower does not consider the home to be his or her primary residence, the home would be considered investment property.

A borrower may have a co-signer that does not live in the home, but the co-signers income isn't as strongly considered as a co-borrower.

–[email protected]