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Old 12-27-2013, 08:19 PM
 
29 posts, read 188,348 times
Reputation: 11

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Hello all,

I am applying for a loan to purchase a home. The lender has called out on some deposits and most of them are no problem, except one. My father had given me cash to help me towards the purchase in the amount of $1500. My parents being old traditional folks pulled this money from under the bed..meaning, it's not a simple withdrawal from one account and deposit to my account. For paper trail purposes, this is a problem. How should I report this to lender so it gets counted? What is the worse can happen if lender doesn't agree to include that? They will just not include this $1500..is that all?

thanks for your replies in advance.
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Old 12-27-2013, 08:24 PM
 
Location: Boca Raton, FL
5,591 posts, read 9,180,878 times
Reputation: 7324
The lender can deduct it from available funds to close. The lender could also ask you to have your parents give a gift letter with a copy of a bank statement showing more than the $1500 in there. That worked for me once and I'm a mortgage broker in Florida. I see it all.

Who is your end lender? Conventional, FHA or VA?
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Old 12-27-2013, 08:51 PM
 
29 posts, read 188,348 times
Reputation: 11
Loan is conventional and lender is bank of america. Should I go ahead and prepare a gift letter? My father gave an additional $2000 which I can mention in the same letter and hopefully that will work.
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Old 12-28-2013, 10:59 AM
 
3,749 posts, read 8,139,878 times
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Won't work with a Conventional Loan. Conventional Gifts require the Sourcing of funds, meaning it cannot be mattress cash. If they "sold something" to get that cash, you will need to furnish a sales receipt, and even that may not work.

You should have talked about this with your Lender on Day One.
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Old 12-28-2013, 12:15 PM
 
Location: Southern California
4,453 posts, read 5,678,916 times
Reputation: 2210
Are you short on cash, do you need the mattress money to close?
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Old 12-28-2013, 07:00 PM
 
29 posts, read 188,348 times
Reputation: 11
Well, they have conditionally approved me but I am not sure if this $1500 would break the deal for me. If I provide the bank statements for my father and point out at some random atm withdrawals, wouldn't that work?
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Old 12-28-2013, 07:12 PM
 
Location: MID ATLANTIC
8,050 posts, read 19,717,768 times
Reputation: 9095
Know what you are turning in before you turn it in. Do dad's random ATM withdrawal dates come just before your deposit dates or on the same dates? So there's a total of $3500 of gift money?

What does the conditional approval letter say about the deposits? If they don't match up correctly, and you now have $3500 in undocumented funds, your problem could have just gotten worse.

Know and understand what you are turning in........don't just throw bank statements at the bank and hope they match up. You need more than that, they better match up.
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Old 12-28-2013, 07:54 PM
 
29 posts, read 188,348 times
Reputation: 11
The deposit amount in question is $1500 not $3500. I looked at my dad's account and he has 3 atm withdrawals which totals $1600 before my deposit transaction of $1500. I can write a gift letter and have it signed by my father that $1500 was given to me in cash and provide the bank statement with that letter.

that should work right?
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Old 12-29-2013, 07:00 AM
 
3,749 posts, read 8,139,878 times
Reputation: 4803
Lender is going to ask for his bank statement, and likely trace it to one of his paychecks, or some form of income. Still, the cash part is such a gray area. And the Lender should provide you with one of their gift letters, for you both to fill out. Hope it works for you!
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Old 12-29-2013, 08:39 AM
 
Location: MID ATLANTIC
8,050 posts, read 19,717,768 times
Reputation: 9095
What about the $2000 gift you mention in post #3? Last time I used my calculator $2000 + $1500 = $3500. Without being able to see what the other lender has to work with, it's hard to offer complete reassurances. Hopefully, the ATM withdrawals were in a tight time frame (like 24 to 48, maybe 72 hours). The guideline requires conclusive evidence the funds in your account originated from his account. This is where the appearance of the rest of the file comes together. Are there other issues? (Don't answer, just throwing out to you what the UW is considering). Are there credit or employment issues? (Again, don't answer). If this is the only issue on the loan, you probably have a good shot if the dates make sense. But, if this is just one additional item to a growing list, risk flags will be flying and scrutiny will be high.
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