My buyer had an 840 credit score, 20+ years on his job and 20% down. Why couldn't he get a mortgage commitment? His wife of 10 years is from Bali. She has a "green card." Last year, they lent the wife's sister $6500 in cash. To buy the new house, the sister gave them $6500 back--in cash. No bank. The lender did not want to make the loan because there was no paper trail for that money. I'm still in shock. So is the mortgage broker. He wants the sister to fill out a "gift" letter and write a 2nd letter to the lender, explaining what happened. The sister already described the money as a loan, not a gift. She is afraid to look like a liar to the bank. Bottom line: Deal is Dead.
That is crazy. How frustrating and with that credit and down payment its hard to believe.
Wow, that is tough! I have had a few deals almost fall apart because of the lender not being satisfied with a 'gift' for an FHA loan. It was a long, slightly embarrassing process for the buyer to prove the gift because the gift money didn't come from a parent.
I've also had a buyer who has a full-time job but saved up her downpayment working at a restaurant. Even though she saved up money for years through this job, the lender said there was no verification where it came from and she ended up having to give her boss the money and he 'gifted' it back to her. I don't see how that satisfied the bank but it did. It's a crazy lending world out there!
Lending has always shifted to extremes ! From anyone can get a mortgage to Can anyone get a loan ?*L*
I have been stopped in my tracks by the paper trail as well. My clients parents were gifting him for the down payment and the bank need to verify where the parents got the money. Insanity at it's finest.
I love how Michael J. Perry put that!
Lending has always shifted to extremes ! From anyone can get a mortgage to Can anyone get a loan ?*L*
It is crazy out there right now. I had a prospective new client with the same problem. They kept thinking that they would have no problem because they had a lot of cash -- but it couldn't be sourced so it couldn't be used!
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