What Would You Accept As Proof Of Funds?

By
Real Estate Broker/Owner with *ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent* 55387-090

Anyone with experience in short sales and REO's know the bank requires proof in writing that the buyer has the necessary funds for the purchase of the property. If the buyer is paying cash I have always advised them to obtain a letter from their bank stating they have the necessary funds for the transaction.

In a recent short sale where I had the listing, the buyer submitted a letter from his bank signed by the Vice President of Banking which included his contact number and email.

Short Sale Proof of Funds

The negotiator with the bank would not accept the letter as proof of funds and asked for a copy of the buyer's account statment. His reason was the wording "access to cash currently on deposit". He said the buyer could move these funds from this account into another account at any time. I responded by saying the buyer could still move funds from an account after he gets a copy of the bank statement. He simply said "A bank statement would be different".

I understand an actual copy of the bank statement is a harder proof of funds, but if there is any issue, the negotiator could call the Vice President and get clarification. If the letter was truly a fraud then what would be the end game? Not closing? I don't understand why banks are making the process more difficult than it has to be. In this case, it ended up being an acceptable offer and went to closing.

close

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Topic:
Real Estate General Information
Location:
Wisconsin Rock County Milton
Groups:
Active Rain Newbies
Realtors®
Almost Anything Goes
Short Sale REALTORS®
REO's & Short Sales
Tags:
bank statement
short sale closing
proof of funds
vice president of banking
short sale proof of funds

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Rainmaker
1,023,815
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

In this market banks and lenders are very cautious.  They need PROOF of funds.

Jul 12, 2012 01:46 AM #1
Rainmaker
400,259
Michael Collins
*ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent* - Janesville, WI
CDPE, SFR , Wisconsin Short Sale Specialist Realto

Thanks for the comment Tim.

But can you elaborate on what the downside risk is here? Is it just that the closing falls through and it's a longer delay to move the property?

Is it that they are afraid of bogus multi-sided (double closing) transactions? 

Jul 12, 2012 01:53 AM #2
Rainer
16,087
Matthew H. Rock Realty
Rock Realty WI - Evansville, WI

Michael,

Both those reasons could be valid. Of course, you would think with the 'Arms Length Affidavit' that most banks are now requiring, they would be covered...

Jul 12, 2012 01:57 AM #3
Rainmaker
592,790
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

Well, I think the negotiator was being hard headed. "The funds are available in the buyer's account" should be sufficient. There is nothing 'different' between the two options, IMHO.

Jul 12, 2012 02:49 AM #4
Rainmaker
400,259
Michael Collins
*ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent* - Janesville, WI
CDPE, SFR , Wisconsin Short Sale Specialist Realto

Thanks Than. I agree.

Jul 12, 2012 03:14 AM #5
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Rainmaker
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Michael Collins

CDPE, SFR , Wisconsin Short Sale Specialist Realto
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