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Did any of you jumping in on the bandwagon note the “provenance of funds”?
Newsflash. It’s not people overreaching, it’s your government. One of the easiest way to launder money is through real estate.
So. OP. Let’s say you’re actually fake, you’re just a drug dealer’s arm candy with a good credit score. The dealer gives you a cashiers check to pay for the down payment on a house. You buy the house and then sell it (or a myriad of other schemes, rentals, etc.) that drug money is now clean. All for a 7-8% cut to realtors? With the possibility of appreciation or cash flow?
In short. Don’t hate the player. Hate the game. You’re going to have to provide your husband’s share of the trust one way or the other.
No, this is "rules" for rules sake on the part of the banker, inexperience on the part of the buyer, and a touch of over-developed "righteousness" on the part of the buyer.
An experienced buyer would know about "seasoning" of funds, as would your proported "drug dealer" - they would deposit the funds into a checking account 60 or 90 days in advance & there's your "provenance" of funds. No documentation required, beyond the bank statement.
When buying a rental a few years back, to avoid raiding my retirement, I deposited a really big "credit card check" to my checking account, waited 60 days & closed on a loan with both the credit-card loan & an investment property mortgage (at a reduced interest rate, because it was 25% down!). We had no other measurable debt & the mortgage + the credit card debt was effectively borrowing every cent of the purchase price. Easy-peasy, perfectly legal & everyone got paid back no problem.
The over-developed "righteousness" is evidenced by not actually *being* the wealthy, cash-rich person the o.p. Envisions themselves as. Getting an inheritance or a gift *isn't* the same thing as putting $50 a week into the bank until you have a down payment- hence the seasoning rule. Someone who saves a down-payment is a better credit risk than someone who has it given to them. Nothing wrong with getting funds that way, but unless the gifts are ongoing & perpetual, it doesn't make you creditworthy.
I mention it because the other sides Real Estate Agent was there hammering on the top deck. He's an ex Contractor which my Realtor has no clue of. It explains the misudnerstanding they had. That all it is is a misunderstanding. She flew to Germany yesterday.
My husband is -also a Contractor, as is the inspector so they all had much in common. So much we went hiking later (though we were instructed to limit conversation, no one spoke much of the house anyhow). E
It was clear his Realtor is a good guy.
I broke protocol telling the other side about the recent loan requirements regarding the trust. And my conversation with Golden One Credit Union loan agent who off the top of his head, told me those were excessive requirements not needed, by law.
Owner of the house is not in a huge hurry to close, though he was before. I wrote him a card saying that i was sorry his wife passed away and found out today, we share a few friends. Well our ex neighbors we haven't seen for 20 yrs live up there. We miss them and planned on seeing them. Shocked when they informed us they knew we were buying the house because they know the owners. They checked on them as they were Seniors and she passed last Feb.
Golden One Credit Union agent explained offhand the rules for the proof of what is required in using trust funds. Our loan agent is requiring way too much "proof". And being the branch manager means very little. Basically we do not owe the entire trust, every page faxed to him. I faxed him enough already.
He's gotten it all except front and back of cancelled check which only the trusteee, my BIL, can provide.
It's been 1 yr and 1 day since we bought some land in another town which has 2 springs and a large gold mine. Many miners in the town are on the list to buy it after 1 year and 1 day, it is priced way way too high for my lack of understanding how much our taxes would be.
The family knew of the mine but not the 2 springs (actually there are 3 but one is a little smaller) , nor that County Records showed an old home already on it...so to build a home will cost 20K less than if there was no record of it. So we can sell that to a cash buyer and pay cash for this house. The owner said if we wanted to rent for a few months to wait for that sale, hed be ok with it. I know he wants to come and stay with us, our ex neighbors told me he got my card of condolances about his wife passing in Feb. My offer he stay with us in his own bed (which he couldn;t bring back to Las Vegas or something). So I guess he really is planning on staying with us. He's a colorful character. It's a hand carved house, excellent BONES. Inspection showed everything is really solid and quality, foundation, plumbing, electrical etc.. yet the old guy refused to finish his permits. It is a beautiful Touristy Town with very few year round rentals. Most people rent their homes out, well alot due just seasonally.
The house also has a few RV hookups. So I think instead of re-modeling, we will just rent the back-yard out. They can use the bathroom and laundry room, separate entrance. We'd barely see them back there. It's pretty private. Save us from remodeling but will help with the monthly payment.
Anyhow the Owner is giving us 48 hrs to see what we want to do. If we want to just rent it for 4-5 months waiting for our land sale to go thru and pay all cash, go with Golden One and a new loan. I don't know if proof is required of anything if we just sell our land to the neighbor (3 Gold mining neighbors want ot buy it, at the lower rate after 1 yr and 1 day rate, I call it) .
We made friends with the 3 full timers couples out of 8 homes on the street. So we will have many friends, well at least some friends there is an excellent Church about 30 min away. I suspect we will be close with the owner of this house for a while, with him coming up to stay the night for many years. If he makes it, he flies off the handle easily. Seems many old people die within a year or two when they loose a spouse. ANyhow it will all work out....we are going to sleep on it. Call our Realtor tomorrow who is in Germany on vacation to see what she says.
Austinite76 is dead on, just more direct. OP, the lender is not singling you out - far from it. We've been providing SOP. This is not lender overlay, but federal regulation, specifically the anti-money laundering Act, part of the Bank Secrecy Act. Is it possible to get around it or get an exception? Only if the underwriter can justify why a shortcut or standard documentation was not used. (We are fairly liberal where I work-as compared to my counterparts- we recently had a cashier's check we could not prove source and the funds we subtracted from the borrower's assets. Fortunately, the borrower had funds over and beyond these funds and we could move forward).
Hopefully, the OP is working with a lender that can find another way to document to their satisfaction. But, I do suggest instead of only offering "no" responses, you sit down with your loan officer and offer alternative documentation suggestions. But the most puzzling is that your Realtor/Trust Attorney is unfamiliar with the documents suggested. Your lender is only following federal law.
Edited to add because I saw your post: loan officers are funny creatures (I should know, I'm one and I work for a CU). If I had a dollar for every time a loan officer did not tell the borrower what the UW was going to require (either from avoidance or lack of knowledge), I would be living in comfortable retirement (and bored out of my skull). That'said why Realtors seek out experienced LOs. Do get with someone that can map out the timing ad document requirements.
Good luck!
Last edited by SmartMoney; 10-14-2017 at 08:30 AM..
I sent the Loan officer copies of the trust bank statements provided by my BIL. What I did is cover up all other transactions except the line that showed where the 50K was leaving (the 50K cashiers check). Along with other stuff my BIL provided
His bank receipt showing the 50K. so I did the same thing covering the balance
Included the hand written letter of explanation from my BIL identifying himself, my husband, my FIL trust etc..
AND our Realtor/Trust Attorney had sent him the entire trust, showing all lines and the amounts each grandchild and child received. Hence it would be easy to match with the Trust bank statements to learn private info of what each beneficiary would receive in inheritance.
I've heard nothing from the loan officer but he's been pretty flaky from the beginning. He's never been real reliable due to going thru a divorce which I just overlooked (it's life) so didn't expect much from him. But we are towards the end now.
There are so many fires here....I am unsure if he's dropped the ball or not. Or if what I provided doesn't suffice the money laundering Act requirements. Maybe he is trying to get a waiver of some kind right now. We are suppose to close on Wednesday.
The GOlden One Loan officer suggested we continue thru this. Our son who also wanted a loan thru this loan officer, has establshed credit now via his guidance, will probably just pay cash for a house. Once we had an FHA loan and it was NOTHING like this has been but different situation. Thanks again SmartMoney , I appreciate your info.
Sounds like you have things well in hand but I wanted to throw in my two cents for others that might be following this.
If you choose to help your kids with a down payment you will also have to provide a gift letter stating it does not need to be repaid, copies of your account where the money came from copy of the check etc. Just like what you are going through now just not as intense. If you want to avoid this you can give the money to them before they apply for a mortgage and with enough time for it to "season" in their account. SmartMoney can probably comment on how long this would be. I'm not in the mortgage business.
Second, there is a bank here (Michigan) doing a mortgage/line of credit loan. The mortgage is for 80% with 10% down and the line of credit is for the other 10% needed so there is no PMI. Cool thing is that the payment ends up being less than one would be paying PMI. Check and see if there are any banks in your area offering such a program.
Sounds like you have things well in hand but I wanted to throw in my two cents for others that might be following this.
If you choose to help your kids with a down payment you will also have to provide a gift letter stating it does not need to be repaid, copies of your account where the money came from copy of the check etc. Just like what you are going through now just not as intense. If you want to avoid this you can give the money to them before they apply for a mortgage and with enough time for it to "season" in their account. SmartMoney can probably comment on how long this would be. I'm not in the mortgage business.
Second, there is a bank here (Michigan) doing a mortgage/line of credit loan. The mortgage is for 80% with 10% down and the line of credit is for the other 10% needed so there is no PMI. Cool thing is that the payment ends up being less than one would be paying PMI. Check and see if there are any banks in your area offering such a program.
Thank you Katie. I think he can avoid getting a loan, as the minimum is 75K anyway, way more than he'd need. He said he'd be willing to turn in some stocks if needed. He is inheriting 30K, we are giving him 50K (50% this year, 50% on jan 1) so he only needs about 30K more. He's got some $$ in the bank too.
We've just come so far by now...that I feel like keeping the same loan agent just to close the house
We cannot afford this house without a loan. In fact, it is planned to be renting out part of the house over the Summer to help make the monthly payments. So if we loose it, we will likely either apply for another loan if it is possible to keep this house, or end up buying a cheaper home. A fixer upper
This is the problem right there. You are close to not being able to qualify for a loan. They want to make sure you are not borrowing money somewhere from a trust as an example, to come up with those funds.
If you are close to the no loan level, they have to take more care in qualifying you for a loan.
They have to make sure this is actually from your part of an inheritance, and not a loan for some or all of the money. If it is a loan, you are close to the point of not being able to handle the sale with just one new first mortgage, they have to make sure you are offering them money that is yours and only yours, not at least part of it a loan.
Remember they can be audited at any time, so they have to protect themselves. If they are audited, they have to prove certain facts, and your type of purchase with a new first loan is one that may be questioned by auditors.
This very much the way things are today, forced on them by the recent real estate crash when loans of all types were made, to meet the quota forced on them that 22% of all loans had to be made to poor people (PC talk--- meaning people that cannot qualify for financing). The rules were really tightened up, and they made it harder and harder to get a new mortgage.
This is the problem right there. You are close to not being able to qualify for a loan. They want to make sure you are not borrowing money somewhere from a trust as an example, to come up with those funds.
If you are close to the no loan level, they have to take more care in qualifying you for a loan.
They have to make sure this is actually from your part of an inheritance, and not a loan for some or all of the money. If it is a loan, you are close to the point of not being able to handle the sale with just one new first mortgage, they have to make sure you are offering them money that is yours and only yours, not at least part of it a loan.
Remember they can be audited at any time, so they have to protect themselves. If they are audited, they have to prove certain facts, and your type of purchase with a new first loan is one that may be questioned by auditors.
This very much the way things are today, forced on them by the recent real estate crash when loans of all types were made, to meet the quota forced on them that 22% of all loans had to be made to poor people (PC talk--- meaning people that cannot qualify for financing). The rules were really tightened up, and they made it harder and harder to get a new mortgage.
Yes and I think it makes it more difficult when your income isn't something they can legally count.
Such as I am paid to drive to and from, work. We also have an EBAY store. I am granted bonuses at Xmas time. And the worst part, is a $2.50 per hr raise starting Nov 2017 I cannot forego. My hope is this closes by then or maybe we'd have to start part of it all over again.
One thing I wish we'd done is just left it alone. Once the trust came into play, I kept asking should I just forego the $$ as we can do it until the loan goes thru. He discouraged it but gave no real concrete reasons. Assumed he just wanted to sell a larger loan, wished he'd have been more upfront about it
So we could've avoided this. Still haven't heard from him, at this point I am hoping it falls thru.
A fixer upper is what we wanted anyhow. Though this house can pay for itself, it requires renting the back part out. No problem but to buy a fixer upper and fix it up, well you sorta wash your hands of it at that point.
And our other land sale is hanging in the background waiting...would sure be nice if this fell thru!
Just to follow up...in the end I assumed this would fall thru
I did not provide the excess info demanded.
Instead, I sent the trust bank statements (provided by Trustee) with everything blocked out except showing the 50K down payment leaving the account. We did not provide the front and back copy of the check after being cashed, just a copy of it beforehand. Plus the letter signed by Trustee identifyin ghimself and my. husband as beneficiaries of said Trust.
It was accepted and the house is expected to close this Tuesday
Thank you everyone who contributed positively to this thread I appreciate it very much
All they need is the check, the receipt for deposit, and the front and last page of the trust. They can ask for your bank statements not the trusts. You do not give the whole complete trust or the statements of the trust. I would tell them to go f themselves that's not needed info. Lots of these f'ers want all sorts of info they don't need.
Everything we own is in a trust and this used to be the case, but no longer is. I used to be able to email the title company just the one page certificate front page of the trust. Now I have to drive the whole thing to whichever title company and let them make a copy of the entire thing to keep on file. If I told them to go f themselves I would never be able to buy real estate investments. Rules change.
I have never been asked to show bank statements even though bank accounts are included in the trust.
What I don't understand is why you had to wait to cash a check that had your name on it. it seems to me if that would have been in your bank account to begin with it wouldn't have been as much of a problem.
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there is an excellent Church about 30 min away. I suspect we will be close with the owner of this house for a while, with him coming up to stay the night for many years. If he makes it, he flies off the handle easily. Seems many old people die within a year or two when they loose a spouse. ANyhow it will all work out....we are going to sleep on it. Call our Realtor tomorrow who is in Germany on vacation to see what she says.
