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My friend just lost a long term job and will be starting one making the same money in 45 days. She was in the process of getting a house in Mass. The lender said that she can still close in the next 15-20 days based on the job offer even though the new job isn't starting for 45 days.
And what if it's not there? Is that a crime? does she give back the house? I told her that I don't trust it. I understand if it's a highly specialized job but it's a middle management thing. The company could have a whole new philosophy in 6 weeks and forget about her.
Guidelines have changed. Fannie recognizes an offer of employment as verification of employment, but the lender would be crazy to not verify the future job independently. That said, many lenders have overlays and require the borrower to start the job, or even produce a paystub (which can also easily be faked). I am betting your friend has a strong loan package, as well.
For someone to manufacture an employment offer and/or a paystub is playing with fire. If a loan goes into default, the first thing they do is reprocess the loan. The fraud would then be discovered and the servicer would pursue criminal charges against the borrower.
Most employment is "at will.". This means anyone can be fired at anytime. This would be the equivalent of that company withdrawing their offer. Again, I am willing to bet your friend was a strong candidate with excellent reserves. And if it were to happen, there is no giving back the house, unless she plans to have a foreclosure on her record.
Guidelines have changed. Fannie recognizes an offer of employment as verification of employment, but the lender would be crazy to not verify the future job independently. That said, many lenders have overlays and require the borrower to start the job, or even produce a paystub (which can also easily be faked). I am betting your friend has a strong loan package, as well.
For someone to manufacture an employment offer and/or a paystub is playing with fire. If a loan goes into default, the first thing they do is reprocess the loan. The fraud would then be discovered and the servicer would pursue criminal charges against the borrower.
Most employment is "at will.". This means anyone can be fired at anytime. This would be the equivalent of that company withdrawing their offer. Again, I am willing to bet your friend was a strong candidate with excellent reserves. And if it were to happen, there is no giving back the house, unless she plans to have a foreclosure on her record.
I just don't trust any company but I guess it's not her fault. Just seems odd that you don't have to be actually working to get a house. But ok.
Guidelines have changed. Fannie recognizes an offer of employment as verification of employment, but the lender would be crazy to not verify the future job independently. That said, many lenders have overlays and require the borrower to start the job, or even produce a paystub (which can also easily be faked). I am betting your friend has a strong loan package, as well.
For someone to manufacture an employment offer and/or a paystub is playing with fire. If a loan goes into default, the first thing they do is reprocess the loan. The fraud would then be discovered and the servicer would pursue criminal charges against the borrower.
Most employment is "at will.". This means anyone can be fired at anytime. This would be the equivalent of that company withdrawing their offer. Again, I am willing to bet your friend was a strong candidate with excellent reserves. And if it were to happen, there is no giving back the house, unless she plans to have a foreclosure on her record.
When you say "strong loan package", do you mean credit score and net asset value (especially the cash reserve, and liquid investment, such as mutual funds)? I think lenders should put more weight on the net asset value of a borrower than his/her paychecks. Any borrower can lose his/her job in a short notice. Many people are living check by check with out much cash reserve. If a borrow has a good job offer starting very close to the closing, the lender can easily verify with the future employer.
My friend just lost a long term job and will be starting one making the same money in 45 days. She was in the process of getting a house in Mass. The lender said that she can still close in the next 15-20 days based on the job offer even though the new job isn't starting for 45 days.
And what if it's not there? Is that a crime? does she give back the house? I told her that I don't trust it. I understand if it's a highly specialized job but it's a middle management thing. The company could have a whole new philosophy in 6 weeks and forget about her.
They're going to fund the loan and keep it on their warehouse line until the first paystub comes in. Relationship Deal. Possible Corporate Relocation. Rules aren't really being bent, as the lender is literally on the hook if she doesn't get that paystub. The loan will remain on their line, constricting their lending ability (to what degree is completely unknown), with the contingency being that the lender waits until she does get a job somewhere at a level that qualifies her completely. Or the loan is a buyback and it's time for the Lender to play Realtor and sell it fast.
My friend just lost a long term job and will be starting one making the same money in 45 days. She was in the process of getting a house in Mass. The lender said that she can still close in the next 15-20 days based on the job offer even though the new job isn't starting for 45 days.
And what if it's not there? Is that a crime? does she give back the house? I told her that I don't trust it. I understand if it's a highly specialized job but it's a middle management thing. The company could have a whole new philosophy in 6 weeks and forget about her.
It's not a crime if she can make her mortgage payment and even if she can't it's not a crime. She can always find another job or go work at Walmart or McD to pay her bills. She may have money saved or other resources she can tap into in case of an emergency. It's up to the lender's discretion.
They're going to fund the loan and keep it on their warehouse line until the first paystub comes in. Relationship Deal. Possible Corporate Relocation. Rules aren't really being bent, as the lender is literally on the hook if she doesn't get that paystub. The loan will remain on their line, constricting their lending ability (to what degree is completely unknown), with the contingency being that the lender waits until she does get a job somewhere at a level that qualifies her completely. Or the loan is a buyback and it's time for the Lender to play Realtor and sell it fast.
FANNIE DOES NOT REQUIRE PAYSTUBS, PERIOD, when you are using an employment offer. There is no paystub post-closing, nothing special at all, just a standard VOE. If someone is telling you a paystub is required, they have overlays.
When you say "strong loan package", do you mean credit score and net asset value (especially the cash reserve, and liquid investment, such as mutual funds)? I think lenders should put more weight on the net asset value of a borrower than his/her paychecks. Any borrower can lose his/her job in a short notice. Many people are living check by check with out much cash reserve. If a borrow has a good job offer starting very close to the closing, the lender can easily verify with the future employer.
Every loan package is reviewed for risk, particularly layered risk. She likely had both strong assets and strong scores. A person's past behavior is the greatest predictor of future behavior.
I hope the OP isn't raining on their good friend's milestone moment. Buying a home is stressful enough, having those around you nipping at your heels with doubts only fuels any second guessing going on in her head. There's no doubt in my mind she has done nothing for the past couple of weeks, except evaluate her options. This reminds me of the neighbor asking a pregnant woman, "are you really sure you are ready to be a mom?"
Every loan package is reviewed for risk, particularly layered risk. She likely had both strong assets and strong scores. A person's past behavior is the greatest predictor of future behavior.
I hope the OP isn't raining on their good friend's milestone moment. Buying a home is stressful enough, having those around you nipping at your heels with doubts only fuels any second guessing going on in her head. There's no doubt in my mind she has done nothing for the past couple of weeks, except evaluate her options. This reminds me of the neighbor asking a pregnant woman, "are you really sure you are ready to be a mom?"
No, I'm not saying anything like that to her. I'm not negative towards my friends. That's why I came here to ask. I have no doubt that she'd do whatever it takes to pay the bills. My suspicion is with the company. I would just hate them to screw her over and leave her scrambling. But I'm generally mistrustful lol and I guess it'd be better to be screwed after you close than before bc at least you have the house.
I am sure if she knew your concern, she would be grateful.....But telling her will only fuel a fire burning deep. Almost every buyer goes through some level of doubt. Don't throw gasoline on the fire.
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