FHA loan problem...HELP! (rate, refinance, bank, lender)

[jdmosh]

My husband and I closed on a home last month and obtained an FHA loan. The problem is that our mortgage broker instructed us to get a cashiers check for a gift that we were receiving towards our down payment. She did not specify that cash on hand was not permissable or that we needed any documentation other than a letter from the donor. We did exactly as asked and now a month after closing, the lender has contacted us demanding the donor's bank statement showing this transaction to us. This is not possible as the cashier's check was purchased with cash on hand. The lender has said that if the documentation requested is not provided than the loan will be due payable as our loan is not insurable by FHA standards. Has anyone run into this and does anyone know what our rights are after closing?

[Norsky1]

DId the person gifting you the money disperse it from thier bank or give you cash? Or did they have cash as well?

[jdmosh]

The person gifting the money, my father-in-law had cash on hand so he didn't have to pull it out of the bank. He went with my husband and purchased a cashier's check from our bank using cash.

[superfly10]

your broker messed up. Every broker I've talked to about FHA loans (or any mortgages) has stressed the importance of a paper trail to specifically avoid "mattress money" funding your down payment. I hope this works out for you.

[chet everett]

superfly is correct

FHA needs a "paper trail" to make sure that you are NOT engaging in any funny business with a cash business.

The lenders generally supply a standard release that has a warning on it that you CANNOT get actual currency: http://home.michiganmutual.com/forms...0AFFIDAVIT.pdf

I would sit down with a lawyer ASAP and try and have FIL document WHERE and HOW he came up with the cash. At least get a believable story, like he took a bit out each week. He better have a REAL checking account somewhere with some kind of balance that looks believable for his income, because otherwise he is going to look a money launderer / drug dealer / tax cheat / government hater types. Be prepared to have some sort of "notarized acceptance of funds source" drawn up too. A good lawyer ought to be able to draft something that would make the Cali and Medellín cartels look like stand up borrowers...

[PatRyanmortgage]

Tough spot... the person giving the gift is technically not a party to the transaction and can't be required to give anything.

They screwed up and their post closing audit probably showed that they neglected to ask for complete documentation.

FHA guideline at HUD Homeownership Center Reference Guide Gift Funds

They're asking for something that doesn't exist... you have to tell them and and say "what now?". Talk to the attorney that closed the loan for you, I think they'll have a tough time calling the loan, the lender is in trouble more than you are on this one.

They're probably going to want to refinance you asap on this one. If that's the case, they should do it at no charge to you and at a rate that doesn't exceed your current rate.