Janna Rankin Scharf, CLHMS, GRI, SFR - Homes for Sale in Coeur d'Alene
I had an interesting conversation the other day with a lender friend. He mentioned that lately he has seen some purchases fall apart in the 11th hour due to the earnest money check.
Underwriters have long been verifying that the earnest money check written when the purchase contract was presented has cleared the bank.
What's new is that now they are also verifying that the earnest money check
was actually written on the purchaser's account. As opposed to a friend or relative's account.
Some mortgages require that buyers NOT receive gift funds. Or that buyers contribute a specific amount towards the down payment, which would include the earnest money deposit. When they discover that the earnest money check was not drawn on the buyer's personal account, the deals have imploded.
As underwriters tighten their requirements and crank up their scrutiny of everything, it's smart to pay close attention to the little things that can cause big problems. There are some surprises that AREN'T fun to receive!