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One of our local lenders was telling us this morning, that the government is now asking for almost all monies to be sourced.
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53 Comments on Did that come from under your mattress?
Like many have said, this is extremely disturbing to me. Most people are not comfortable sharing this type of information.
Sharon, if the loan is to be sold in the secondary mortgage market it must conform to FNMA guidelines, and one of those requirements is that every penny of the money used by the buyer must show a source... with a prove-able paper trail. Also, this is nothing new. It has been this way for a long time.
If the buyer is not "comfortable" sharing this information, the lender will not be "comfortable" making the loan.
It's the "golden rule." Those who have the gold, make the rules.
I would guess that there may be some sort of investor offering a non-conforming loan that may not have this requirement, but that would also bring with it the possibility of a higher rate, and perhaps a higher down payment. Again... see the golden rule above.
Alan - I understand the deposit issue if it's being used for down payment or closing, but otherwise don't see the problem.
Big fan of the mattress...or if that doesn't work, you can go through my husband's pockets, I'm up $35 so far.
This is the world we live in, understand it and prepare for it. I think as a Realtor part of our job is to help clients understand the process.
So, what would they do if the answer is, "I have saved $2/day under my mattress for 35 years. That's where the $25K came from..."?
I had someone offered me to buy one of my listings for $140,000 . . .when I ask for proof of funds. .he invited me to his house. .and his plan was to bring 14 cashiers checks for under $10,000 to the closing table. .. .apparently not too many people has dealt with foreigners that don't trust banks because of past experiences. .
Karen Anne - I understand that... I guess the part I don't understand is why it's any of their business where mom and dad got their money... if they've "gifted" it to me... it's now mine, and has no bearing on my ability to repay the loan (other than good).
Greg - yeah... that's what I'm calling myself, these days... "well-seasoned".
Hella - and better on thousand dollar bills.
Leslie - the banking world likes those regular paychecks... that's why we Realtors used to use "no doc" loans.
Sharon - many have said that this is disturbing for you?
KA2 - ahh... you gotta love the Golden Rule.
Christine - I don't even really see the problem with a downpayment. Once it's yours... it's yours, right?
Karen - I've been a big fan of mattresses since I was a teenager... hey, you could easily be up $35.00 if you went through my pants pockets and seat cushions.
Laura - you're absolutely right. Ours is not to reason why... but to explain it to our clientel.
Jay - I think there would be a great deal of eye rolling, and harumphing, but in the long run, if you could show a pattern of deposits, they'd have to accept that.
Fernando - yikes... that would make me very nervous.
Sure Alan. Show a "record" of regular $2 deposits into your mattress to Big Brother! What "record" would "they" accept?
Jay - I think your bank account would show daily deposits of $2.00... In fact, when I was much, much younger and newly married, I did just that. Instead of spending money on lunch... I walked down to my local bank, and deposited my lunch money ($2.50-$5.00) each and every day... which showed up on my passbook... (remember those?).
Alan - read carefully. Who is speaking of making daily deposits into the bank? My question was what if somebody, or to use your example you, took that money every day, pocket money which averaged $2/day, and put it in a barrel (metaphorically under your mattress) for 35 years and then one day brought it out to be used to buy a house?
Where's the record? What's the record? And what would "they" (your word) accept as a reason you had that barrel full of money?
This whole "where did you get the money?" thing seems pretty insidious to me. It heats up my Son of the American Revolution blood.
I remember passbooks. I got my first in 1958 when my mother opened my first bank account in the Bank of Bethesda (Maryland). My age was 5.
Jay - oh, gotcha... you're right... I misread. Yeah... I think you'd have a problem.
btw... in your example in the "house of grace" (Bethesda)... you're only a single year older than I.
I'm actually receiving a higher interest rate in my mattress!
Alan: About the money from Mom and Dad. Looking at it from the paranoid angle of the underwriter... which is what he/she is paid to do... it could simply be drug money that the buyer got from selling drugs, and then gave it to his parents so they could give it back to him... and simply say that he did not have to repay it.
The original source of the funds needs to be verified so that everything can be in compliance with the Fannie Mae Underwriting Guidelines.
No verification = no loan approval. Buyer's choice. That's why they call them "conforming" loans.
Jay: In your $2 a day example, your best and easiest bet would simply be to use a lender that had an investor that was doing "non-conforming" loans. Again... your choice.
Glenn - probably all too true.
Karen Anne - I hadn't considered the possibility that it might have come from the borrower.
Hi Alan,
The story is told of the unassuming couple who brought a pillow case full of cash to the closing. They spent over an hour counting out $324,568.
They were short $40,000 to close the sale!
The husband tells the wife, indignantly -
"I TOLD you it was the wrong one. You were to bring the OTHER pillowcase!!!"
Phil
Phil - are they looking to adopt?
You have hit on one of my hot button items. Think about it how dare the banks demand to have your cash conform to their narrow criteria. If I want to stick my money under a rock that should be my right it's my money! Is cash legal tender or not!
I don't accept the banks answer that "these are fanniemae regualation". Whatever! Get them changed!
Most of my recent transactions have been cash! There is a reason for that.
Kathy - it's the golden rule.