Latest Discussions : Buying & Selling Homes

clareezine

04:24PM | 04/02/03
Member Since: 02/20/03
6 lifetime posts
it seems that my lender try to harrass me out of the loan. They asked me for same type of documents for at least 3 times. for example, I recieved gift fund from my family, and have send them the copy of clear check from my family, now they're asking me to get bank statements from my family to prove that money did come from them.
and since I have some collection accounts, they want me to call up each creditor to get a statement obtain the amount I need to pay off and will pay off at the cloing date through my title agency.
My question is,
1. am I suppose to do all these?is it normal that the lender doing this to me?
2. is it too late to go to a different lender since the selling contract is due by the end of this month?
I'd really appreciate if somebody could give some tips!!

rmurray223

04:53PM | 04/03/03
Member Since: 01/03/03
97 lifetime posts
oddly enough that is pretty common, if the loan rep was prepared they would have asked for all that up front however. If you are running into problems with a time frame just ask the seller or your agent to have it extended for a few days

clareezine

08:19AM | 04/04/03
Member Since: 02/20/03
6 lifetime posts
thanx a lot, that makes me feel a bit better.

slider9499

02:39AM | 04/07/03
Member Since: 04/06/03
19 lifetime posts
Let's look at each problem:

1. Gift Money. If a relative gave you money to help you purchase the home, either to help with the down payment or closing costs, then you need to have a gift letter completed and signed by the person giving you the money. You do not need to have the person's account verified, only yours.

2. Credit problems. Your lender should have run a credit report on you. This report would give them a FICO score which basically is a number that states your credit worthiness. The higher the number the better. If you have problems due to late or missed payments it is then your responsibility to get them cleared up.

If you are not happy with your provide find someone else. I do not know where you are in the contract/home purchase process, this is a major factor that needs to be considered before applying with another institution. But it would not hurt to make some phone calls and inquiries.

Rockinfigz

10:20PM | 04/08/03
Member Since: 04/01/03
8 lifetime posts
im in escrow right now and in the same boat..my lender is asking me for everything which i provided. overall everything is going smooth. but one questions.

i received $10K in gift money from parents for part of down payment..well of course they asked for a gift letter saying where the money came from and from whom etc etc..

now what if im a anti bank person and save all my money in my closet. say i have $20k in cash in my closet saved throughout the yrs.. how can u prove that. what im trying to say is what if my parents gave me $10k in cash and tell the lender i had this money in my closet its mine.

whats stops someone from getting say $50k from family and telling the lender that he or she had saved that $$ and kept it in his or her closet??

[This message has been edited by Rockinfigz (edited April 09, 2003).]

[This message has been edited by Rockinfigz (edited April 09, 2003).]

slider9499

01:53AM | 04/09/03
Member Since: 04/06/03
19 lifetime posts
Rockin-

What you are saying is a ridiculous statement. I need to be brutally honest here - come back to the real world. Take the money from your relatives, give the bank the gift letter and then move on. Stop making up fantasy "what if" scenarios. Be happy you have the opportunity to buy a home. Many, many people today are wondering where the money will come from for next month's rent.

rpxlpx

06:20AM | 04/09/03
Member Since: 03/13/00
1674 lifetime posts
slider9499 has a point. Mortgage lenders are in business to make money, and it's a competitive business. They are not going to try to lose your business by offending you intentionally. They just set up rules to do what they can to ensure they won't lose their "assets" by lending to people who won't be able to make the payments.
The rules can be a pain in the neck for you and me, but they protect the lender and, in the long run, they protect all of us from higher interest rates caused by loan defaults.
Fortunately, you only have to do this once.

Rockinfigz

10:55AM | 04/09/03
Member Since: 04/01/03
8 lifetime posts
slider i understand what u r saying and i didnt mean to make it a "what if" statement or a ridiculous statement..what im trying to say is these lenders want to know where the money came from and need documentation. but seriously what if u had saved money for down payment and not kept it in a bank and say here is $20k for down pay in cash...how would u document that.

[This message has been edited by Rockinfigz (edited April 10, 2003).]

rmurray223

09:27PM | 04/10/03
Member Since: 01/03/03
97 lifetime posts
no need to badger someone that has a what if question, he is trying to understand the process and the whys of things which is why he is on this bulletin board, now back to the question. the bank basically wants a gift letter as an explanation to the irs, for example if you take over 10k out of a bank they have to report it to the irs. If you have saved 20k over the years under a pillow then put it as a down payment the irs is going to want to know what is going on and question the hell out of you and the mortgage office wants to provide that form as an explanation. if there was no gift letter they just see it as wow this guy just came up with 10 grand out of nowhere whod he steal it from.

Rockinfigz

11:43PM | 04/10/03
Member Since: 04/01/03
8 lifetime posts
rmurray i appreciate your feedback.thks ...so basically what u r trying to say is that it will not work? because im sure theres someone out there with money they saved under their pillow to use to buy a home..and i understand what the irs will think if u just come up with alot of cash...i would think the same. so if their is this person how would they go about documenting that he had saved this money.

i know im getting carried away with this topic but i was thinking this to myself through the process of buying my home and im just curious.

Jim D

12:52AM | 04/11/03
Member Since: 01/06/01
342 lifetime posts
Rockinfigz - hi, what you've described can work, if you find a lender willing to help you. You're approaching this as an honest person who's worked hard and scraped up the cash. Here's another way to think about it...big-dollar real estate is one of many ways to launder money. Realtors in CA, FL, and other places have had people walk in and plunk down suitcases of cash. They recognize it may be drug money or it may be lottery winnings - they decide if they'll ask the questions or not. There's probably a few still in jail or out of business who now wish they'd turned those suitcase holders away...

In your hypothetical situation, the lender reserves the right to demand proof that the cash is okay. They could ask you to provide past income tax returns showing your income levels, plus past utility bills, letters of reference from landlords, etc. They could ask what types of credit cards you have and want to know how you pay those bills (money orders purchased at the corner convenience store?). You may have to produce several character references who can swear you've never, ever used a bank in your life. It's still going to be up to the lender. If you look believable and sound believable, the lender may decide to work with you. If you don't look & sound believable, then you'll be looking elsewhere. They're not going to go to jail because of you!

I know personally that what you've described will work. I grew up in NE Ohio, not far from a large number of Amish and Mennonite communities. I even worked at an Amish-owned business during high school. They save their money up, sometimes in their barns, nowadays more in Amish-owned banks. I have a good friend I've known for over 35 years who is Old-Order Amish - the kind who don't have electricity in their houses, who don't own cars, etc. - and I saw him purchase his current farm in 1972 for $200,000 in cash. He and his wife had saved it up, and much of it was inheritance money from their fathers when the fathers passed away - because they didn't use banks.

So, it's possible. However, should you try to make a home purchase this way, it may or may not happen. Regards to all! Jim D/Heathsville, VA


Rockinfigz

09:04AM | 04/11/03
Member Since: 04/01/03
8 lifetime posts
hey Jim u just answered my question thks alot!!

clareezine

10:28AM | 04/11/03
Member Since: 02/20/03
6 lifetime posts
Slide9949
so y were saying that my bank was asking about verifying the account of the gift money from is out of regular procedure?
cause they've been asking all kinds of documents to prove the gift money, say, withdraw recipt, cleared check, and now even the account statement.
I know I do need to take care my collection accounts. But in the very beggining the bank told me we'll do all that at closing date which they didn't tell me I'm suppose to call my creditors myself, which I assumed I'll pay they and they'll pay my creditors.
now that I'm thinking about going to call up my creditors and pay off my debt.
Here's my another question,
1. Should I go to somebody else instead of staying and continue to be fooled around?
2. say I pay off all debt now, and try to get a new credit rating. How soon will my credit be cleared out?
3. And will I be able to get a loan approved right after that?
thanks a lot!

rmurray223

08:24PM | 04/11/03
Member Since: 01/03/03
97 lifetime posts
Jim D. is the man he is 100% right. I'm glad there are a few people on here that know good things

Flipper

06:54PM | 04/16/03
Member Since: 04/01/03
4 lifetime posts
Another reason they want the documentation is to verify that the money is truely a gift, and not a loan that you need to pay back. If it were a loan, it would be considered debt and therefore it might adversely influence your ability to repay the loan you are seeking.

happytrails

04:44PM | 05/16/03
Member Since: 05/15/03
26 lifetime posts
My brother was one of those people that stashed his money at home. I don't know why he did this. We tried to tell him that he could be robbed, burglarized, or the house could burn down. (I think he liked to count it... hahaha) Anyway, when he and his wife went for a mortgage, he had to explain where this money came from. I think he may have had to sign something for the bank too. It was a bit of a hassle but they did lend him the money. (This was only a couple thousand dollars) Everyone involved (the realtor, the banks, etc.) thought it was strange and he finally understands that he should save money in a bank. Now he likes to see his interest building up.


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