Never Lie to Your Loan Officer Because Every Statement is Verified!

By
Mortgage and Lending with Credit Werx, LLC.
http://actvra.in/4vDK

Seriously, we verify and document everything!

 

I would never come right out and call someone a liar because that would be bad for business and afterall it could just be a series of miscommunications. The thing about obtaining a mortgage though is that everything Pinochioand I mean absolutely EVERYTHING needs to be documented. Everything that you tell your loan officer will be verified before we get to a closing, believe me!

So, I took an application sometime last month and while these people were not the best borrower's in the world they had pretty decent credit and were qualified for the loan. I was a little skeptical because of their ages, at just 19 years old, but I DO NOT DISCRIMATE in anyway under any circumstances. If you are legally an adult and qualified for a mortgage loan I will work with you.

Now, these people were qualified for a USDA Rural Housing loan so I issued a pre-approval. The only thing was that while they said that they had funds needed to close it was not in their bank account. I sent them an email two days before they were scheduled to meet with their agent to get an offer together. I told them in the email that they are pre-approved and all set to make an offer but to put the funds needed for closing into their bank account. By the time this thing was underwritten we'd be working with seasoned funds but it was imperative that they get that money into their account ASAP. I also told them not to move funds around until after the closing.

They replied to my email saying that they would get that money into their account "pronto"  and I took them at face value. Their offer was accepted and they came in to our office to sign disclosures a couple of days after we opened a file for them. They hadn't made the deposit yet but they did put down a $500 earnest money deposit. I reminded them again to make that deposit into their account right away and so did my business partner. As they were leaving my partner hollered out to them "Get that money into your account!" They assured us that they would and again I took them at face value. 

Everything seemed to be going really smooth on this transaction. Appraisal came back good, title was in, and a conditional approval issued. It was time to collect the conditions, submit them, and wait on the clear to close. the conditions seemed simple enough. I had to get up to date bank statements or most recent prinouts signed by a bank rep showing funds needed to close, had to source a couple of small deposits, and get some information on the repayment type on student loans. I knew that the student loans were in deferrment but I needed some proof of that because sometimes that changes without being reported to the credit bureaus.

It was June 29th when the conditions were issued and the bank statement wasn't going to be issued until July 1st. I wanted to expedite this file because I knew the buyer's and seller's agents and wanted to get this done for them quickly. The borrowers wanted to close as soon as possible and the home was already vacant. I had a handy Borrower Signature Authorization on hand signed by both borrower's so I called up their bank, faxed over the authorization, and got a prinout signed by a bank rep. This is where I ran into the first BIG RED FLAGFunds needed for closing were not in the account.

I contacted the borrower and told her that I obtained a copy of the prinout and she immediaately got upset. She said that no-one had told her that we were going to get that and that if someone had told her that she would have made sure the money was in the account. The thing is I had told them both from day one that I would be obtaining documents on their behalf, that I needed a bank statement showing funds needed for closing, and that they deposit needed to be made into their account ASAP.

The following day I received an email telling me that they made 3 seperate deposits into their account as funds needed for closing. That makes it more difficult because the funds are not seasoned and they are 3 seperate deposits that need to be sourced. Even worse, they had been moving small sums of money around all month. I sourced those 3 deposits, gathered up the original conditions, and submitted them.

That opened another can of worms because none of the 3 deposits on their own was enough for funds needed for closing and there were a handful of other small deposits. I was issued another handful of conditions the following day. There were 4 deposits in particular that were above average size that needed to be sourced. I asked the borrower's about them, they denied having made one of the deposits, and said that the other deposits were child support. He told me that his parents had agreed to pay him child support directly to help him with his expenses until he completed college, turned 21, or whichever came first. I asked him for a copy of the child support order. He told me that his mother told him that there was no child support order in place and that his parents has always just agreed to make the payments to him. Those deposits were not the same each month so  when I inquired about that he told me that on his mother's months they total $496 and on his father's month they total $600. I asked him for cancelled checks to show this which he was unable to provide because his parents actually transfer the money from their accounts into his. The other deposit that he initially denied making he admitted to after I pulled the accounts up and told him which day the deposit was made. He then remembered that it was from the sale of a couple items on Craigslist; an Xbox and a bookshelf. I asked him for the receipt for the sale of the items and he said that he didn't get a receipt. I asked him to contact the people that he sold the items to in order to obtain a receipt and according to him those people were unwilling to provide a receipt. After some digging I learned that there actually was a court order in place. His father provided documentation showing me that his wages are actually garnished $125 each week, paid to the mother, and she makes all of the deposits into his account via transfer. His mother was unwilling to provide a copy of the order or a signed authorization so that I could obtain it. 

After all of this I made a suggestion that maybe we negotiate an extension on the contract and that he make the deposit in one single large enough for closing deposit, stop moving money around, and ask his mom to stop making unverifiable deposits into his account. He replied to that suggestion by telling me that his hours were cut at work. I called his employer for a verbal VOE, in an effort to help him, so that I could issue a denial letter, and he could get his earnest money deposit back. His employer confirmed what I suspected which was that he lied about his hours being cut.

This was the smallest deal that we had all month and I put more work into it than any of our other files. I was not going to issue a denial letter because they were approved pending conditions that I believe could have been satisfied if they had told the truth and been willing to cooperate with us. This was a referral from an agent that we do a lot of business with and I know the listing agent. After I told them that 
the file will eventually be withdrawn due to their failure to provide the required conditions they called corporate and got a
 commitment from them to issue a denial letter. Then they called another local agent, whom I did not know until that point had shown them the home first, and told her that my business partner and I had told them not to work with her; this was completely fabricated. That is something that I would never do! I would never try to take business from one agent whom a borrower/buyer has a relationship with and give it to another.


Mortgage Application Denied

I told them from day one that everything that they told me would be verified and documented as it is on all files. Trying to work with them has been rife with inconsistencies and untruthful statements. In the end these people were denied! I will be so glad to put them far back in the rear view. Good Riddance!

And remember, if you are applying for a mortgage loan please be completely honest with your loan officer because everything will be verified and documented!

 

Thanks for reading! Comments are always welcome and appreciated!!!

 

Posted by

Christopher Ohlsen

37 Boynton Ave

(845) 243-5293 (Office)

(518) 565-0799 (Cell)

www.plattsburghmortgage.net

chris.ohlsen@guaranteedrate.com

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Michael Dagner 07/18/2014 04:43 PM
Topic:
Home Buying
Location:
New York Clinton County Plattsburgh
Groups:
All About Mortgages/Mortgage Networking
It's all about them (ThemThem)
Clinton County Real Estate
Addicted to Active Rain
Bananatude
Tags:
mortgage loan
plattsburgh mortgage
truthful lender

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Rainmaker
1,383,145
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

When it comes to the mortgage process there is only one way to be - truthful.   Loan applicants....a lot of folks will sweat bullets to help you close but, please be honest!

Jul 17, 2014 04:30 AM #47
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Thank you Gary! Well Put!!! When you have a team working on your behalf to assist you in the purchase of your home the least that you can do is be honest. Anything else and the transaction could and likely will fall apart.

Jul 17, 2014 04:35 AM #48
Rainmaker
1,936,212
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

This is one aspect of the mortgage process that is poorly understood by many home buyers (not that they shouldn't lie), but the concept behind the seasoning of deposits in bank accounts.

Jul 17, 2014 04:38 AM #49
Rainmaker
185,027
Jennifer Ferri
Title Junction, LLC - Fort Myers, FL

And tehn they wonder why they get in trouble or the market turns bad! Seriously you need to lie??? UGG!

Jul 17, 2014 05:19 AM #50
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Nina - yeah, you've got that right. I explained to them that the funds needed to be seasoned and asked them to make the deposit right away. They thought that I somehow wouldn't know if they snuck the money back into their account before the statement was issued July 1st. If it's in the account it's in the account...lol. Forget about the fact that every transaction is dated and needs to be sourced.

Jennifer - I know! This is the kind of behavior that turned this market upsidedown in the first place. After all of the new rules and regulations that were passed in 2008 after the meltdown between 2006 - 2008 and then implemented in 2010 there is no way that anything like this is going to get by us.

Jul 17, 2014 05:54 AM #51
Rainmaker
1,069,186
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

Any misrepresentation would of course be fraud and carry with it severe consequences.

Jul 17, 2014 06:54 AM #52
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

I know Jeff and if the seller's do not want to let these buyers off the hook they don't have to. I don't think that anyone involved wants to go through the trouble of prosecuting these kids but they certainly could if they were so inlcined.

Jul 17, 2014 06:56 AM #53
Ambassador
1,102,299
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I was trained back in 1989 by a true loan officer about this. One of his favorite sayings to prospective buyers was 'you can lie to your wife or husband, your priest, or the IRS, but never lie to your loan officer". 

Jul 17, 2014 09:26 AM #54
Rainer
247,600
Gerard Gilbers
Higher Authority Markeing - Asheboro, NC
Your Marketing Master

I was amazed when my daughter told me I couldn't transfer $20 into her account for birthday money , since they live a couple of states away.  The issue of not having the money for closing and then telling lies about it is a different story!

Jul 17, 2014 11:53 AM #55
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Joe - LOL, very true. Just like Matt Brady said up above, if there are potholes we will create the best strategy to navigate them. If it cannot close it cannot close but lying is by far the worst approach.

Gerard - Your daughter is a smart cookie likely following the instructions of her loan officer. Not sure that $20 would have needed to be sourced if she already had seasoned funds for closing in her account. However, if she didn't and if she then made the deposits for funds needed to close in small seperate deposits every deposit into her account may have had to of been sourced. Still, not insurmountable if you were willing to help her. May be unorthadox but I tend to go the extra mile when need be to get the loan closed. Her loan officer may have asked for a copy of your bank statement showing that $20 leaving your account to correspond with the $20 going into her's via electronic transfer. As a good parent, you probably would have had no problem with that if the alternative was that you daughter lose the home that she had her heart set on; Though you may have wondered why the bank needed it and a good loan officer would have explained it to you.

Jul 17, 2014 10:56 PM #56
Rainmaker
207,655
Adam R. Cohn
STANDARD MORTGAGE CO. - Boca Raton, FL
We actually get mortgages closed FAST!

Its amazing what people will try and get away with these days.

Jul 18, 2014 04:29 AM #57
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Yeah it really is Adam. This isn't something that I run into every day which is why I was inspired to write a blog post about it. It is pretty amazing though that they thought that they could just cut corners and provide inaccurate information expecting me to just take their word for it without actually verifying.

Jul 18, 2014 04:31 AM #58
Rainmaker
500,398
Carla Freund
Keller Williams Preferred Realty - Apex, NC
Raleigh - Cary Triangle Real Estate 919-578-3111

Christopher, Unbelievable to think people would lie to their loan officer but, I'm sure it happens. I try to listen for red flags when I'm with buyers and sometimes have to ask if they told their loan officer. It's not going to do anyone any good if they're not up front.

Jul 18, 2014 08:10 AM #59
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Carla, it is unbelievable because obtaining a mortgage is the one thing in where every detail is verified. After the big blow up of a few years ago there is absolutely no way to skirt an issue. When he told me that there was no child support order that is something that is a matter of public record. When he told me that he made a deposit that he didn't... after he was unwilling to help me source those deposits he lied again... said his hours were cut which I confirmed was untrue with a verbal VOE and I believe that he said this because he wanted a denial letter so he could get his EMD back; that is the worst of it and where he opened himself to a potential lawsuit for specific permformance.

Jul 18, 2014 10:20 AM #60
Rainmaker
615,013
Michael Dagner
Brokers Guild Classic - Denver, CO
Your Denver Homes Realty Expert

I find that most home buyers are forthright, but a few bad apples always seem to think they can manipulate the process.  Nice post! 

Jul 18, 2014 04:23 PM #61
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Thank you Michael. I generally agree with you. This one was an exception and as a result worthy of writing a blog post about. My business partner and I are fortunate to be able to work with a lot of great borrowers. We have closed quite a few this month for really great people and with our little branch in Plattsburgh NY (DBA: Plattsburgh Mortgage Company) have already single handledly doubled our corporate team's volume. We anticipate an even better month next month :)

Jul 18, 2014 10:26 PM #62
Rainer
24,259
Craig Hatcher
Georgia Residential Realty, LLC - Smyrna, GA

Honestly is the best policy, I wish more people would be upfront with loan officers. It can be frustrating to help someone to only learn right before closing they can't buy because of a tax lien or their income isn't verifiable.

Jul 19, 2014 07:14 AM #63
Rainmaker
129,260
Diana White-Pettis
Exit Bennett Realty - Upper Marlboro, MD
GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale

If a person is accustomed to getting away with being untruthful, the loan application is a dangerous place to provide false information.  Honesty is the best policy and it will get you into places that dishonesty could never enter.  Buyers, just tell the truth so that lenders can use their time wisely helping you with buying a home.

Jul 19, 2014 10:38 AM #64
Rainmaker
81,045
Christopher Ohlsen
Credit Werx, LLC. - Malone, NY

Craig - Yeah in this case we were pretty close to the finish line. the first round of conditions seemed simple enough. I believed that they funds needed for closing was in their account until I recieved the most recent bank prinout signed, stamped, and dated by a bank rep. I expected to collect those conditions, submit them, and then wait on the CTC. It was definitely a frustrating case and we are still waiting on the denial letter from corporate which the agents involved are getting ancy about; ultimately it may end up hurting those relationships if corporate takes too long to issue the letter.

Diana - Thank you for that! Time is a valuable comodity in this business and what a waste of it this was. Honesty is always the best policy for sure and there is no way for dishonest the dishonest statements made here to fly. There is no chance that we were not going to verify and confirm everything. Now everyone involved is upset; the buyers that are now denied for their lack of candor, the agents, the sellers. It could have all been avoided and this young couple could be enjoying their new home right now if they'd just been upfront and honest about everything.

Jul 19, 2014 11:24 AM #65
Rainer
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Mustapha Mahmood
Mustapha Mahmood - Thorsby, AL
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Best Regards.
Mustapha

Aug 09, 2016 05:27 AM #66
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