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Old 04-20-2011, 09:15 AM
 
Location: Rolesville
75 posts, read 23,333 times
Reputation: 66
Default Buying a home and Proof of Funds letter?

Hello everyone, I know this will probably sound stupid but when wanting to purchase a home with cash, and the lender requires a Proof of Funds document, can that document come from the buyers company? Meaning the funds are not in a financial institution but are actually physically handled/held thru your own company?
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Old 04-20-2011, 09:21 AM
 
Location: Chapel Hill, NC
8,215 posts, read 11,562,962 times
Reputation: 7194
If you're paying cash, why is there a lender?
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Old 04-20-2011, 09:24 AM
 
392 posts, read 725,551 times
Reputation: 155
Quote:
Originally Posted by CHTransplant View Post
If you're paying cash, why is there a lender?
Do you mean the bank is questioning where the cash came from?
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Old 04-20-2011, 09:25 AM
 
Location: Rolesville
75 posts, read 23,333 times
Reputation: 66
Quote:
Originally Posted by thesnowapefamily View Post
Do you mean the bank is questioning where the cash came from?
Yes the property is bank owned thru foreclosure and they require a POF document. Its a PITA!
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Old 04-20-2011, 09:31 AM
 
Location: Raleigh, NC
10,294 posts, read 16,968,004 times
Reputation: 5910
When I have a listing that sells and the buyer is paying in cash, I also ask for proof of funds. This isn't that unusual.

Shouldn't be a big deal. You can provide a copy of your bank account, showing the funds or a letter from the bank (on bank letterhead) confirming that you have the cash in an account.

It would be beneficial to you to find out which one the foreclosure bank would prefer.

Vicki
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Old 04-20-2011, 11:10 AM
 
Location: NJ
17,580 posts, read 19,092,950 times
Reputation: 15351
Certainly sounds like an unusual situation. Does this mean your company is buying the house for you?
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Old 04-20-2011, 11:23 AM
 
Location: Kingman
81 posts, read 129,623 times
Reputation: 39
If its coming from your company, a letter from your company (with or without a bank statement showing the funds available) stating that the company has the funds available and is providing it to you to use would work.
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Old 04-20-2011, 08:04 PM
 
Location: Snohomish, Washington
57 posts, read 89,193 times
Reputation: 42
Remember - CASH is CASH - not stocks, not bonds - just CASH - liquid etc. Asking for proof of funds is typical in REO transactions from my experience.
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Old 04-20-2011, 08:13 PM
 
Location: Tempe, Arizona
4,511 posts, read 7,019,755 times
Reputation: 2099
Quote:
Originally Posted by tandasullivan View Post
Remember - CASH is CASH - not stocks, not bonds - just CASH - liquid etc. Asking for proof of funds is typical in REO transactions from my experience.
Actually, I've had sellers (including REO sellers) take brokerage statements with stock assets as proof of funds. Main concern is that they can be quickly liquidated to get the cash.
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Old 04-20-2011, 09:20 PM
 
Location: Rolesville
75 posts, read 23,333 times
Reputation: 66
Quote:
Originally Posted by BillieHiser View Post
If its coming from your company, a letter from your company (with or without a bank statement showing the funds available) stating that the company has the funds available and is providing it to you to use would work.

Yes the money would be coming from my company so I have assumed that a letterhead with a statement that the company has the funds to cover the stated amount should suffice. However I have run into some real estate agents who require something from a financial institution and I am not willing to do that! Some have told me I could have the cash held in a trust fund located in an attorneys account. I do not trust that either. I thought cash was KING and I am finding out the opposite. Quite an experience I will tell you that!

I asked my real estate agent the other day the following question.
"What if I go to the bank that holds the mortgage and show them the cash as I make my offer" He looked at me like I had lost my mind! I thought cash was a good thing. Apparently it isn't so when it comes to real estate deals!

I even asked if this strategy might work. I deposit a large amount of escrow when I make my offer and if after the offer is accepted and I do not close the deal I lose a very large amount of money. NOPE he said that would not work either. I just dont get it?
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