Aces High Bulletin Board
General Forums => The O' Club => Topic started by: CAP1 on December 12, 2008, 12:12:58 PM
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my brother lives in central florida. he's trying to get a mortgage, and needed some money for escrow. i lent him $1k, from my business account.
now the mortgage company is telling him that i have to provide them with a statement showing that i legally had the money to lend(as far as they know give) to him.
WTF??? same last name, AND a company check.
i'm understandably hesitant to send them any of my account info, as it's noone's business except mine.
anyone hearsd of this before?question.
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Why would you need to prove that you "legally" had the money available to lend him?
The federal reserve lends people money all of the time without having it. And they charge interest, too.
I would look deeper into ANY company, before I divulge any financial info to them.
Perhaps they are concerned that (since you are brothers) he didn't "help himself" to the check and signed your name to it.
I would offer a notarized letter stating that you, did indeed, lend him the money, but not any account info.
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Could you give him the money and then send him to another lender?
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It's actually part of the current crisis and lender's trying to reduce risk.
However you shouldn't have to give any form of account information. If you own a business, a note on company letterhead with you stating you have given him the money, and you had the resources to lend, should suffice.
If anything, you could call them and tell a fib........ Call them and say "my attorney tells me that I shouldn't give you any form of detailed information regarding my business as I am not trying to get a loan from you. I was also told that a letter sent to you is legally binding for the pruposes you need and will comply with your risk management philosophies."
See what they say to that.
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The term "big brother" comes to mind it would seem.
zuii
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my brother lives in central florida. he's trying to get a mortgage, and needed some money for escrow. i lent him $1k, from my business account.
now the mortgage company is telling him that i have to provide them with a statement showing that i legally had the money to lend(as far as they know give) to him.
WTF??? same last name, AND a company check.
i'm understandably hesitant to send them any of my account info, as it's noone's business except mine.
anyone hearsd of this before?question.
Still trying to wrap my head around that one, also. What, exactly, does that mean? Can one IL-legally have money to lend. And under what conditions would it be illegal?
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Basically... a good attorney would be able to get the money back, not from brother, but from the mortgage company if his brother had to foreclose, or..... If CAP went bankrupt, could actually point the courts to the money lent and the court will "pro-rate" it's value, take most of it back and use it for paying out the bankrupt company's debt.
Still trying to wrap my head around that one, also. What, exactly, does that mean?
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Simply send them a letter saying you legally had the monies to lend and sign it. That is all they need.
He should have deposited the money in his account and paid it by his own check.
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Basically... a good attorney would be able to get the money back, not from brother, but from the mortgage company if his brother had to foreclose, or..... If CAP went bankrupt, could actually point the courts to the money lent and the court will "pro-rate" it's value, take most of it back and use it for paying out the bankrupt company's debt.
That doesn't explain the me what I highlighted. Define "legally had the money".
I wasn't aware that there was a legal, and an illegal aspect to having money (aside from ill gotten gains from a crime, etc)
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My Bad...... That could just be the wrong word being used...... Or now, with the whole crazy mortgage crisis, I imagine it's possible that people are using shylocks & sharks instead of banks or friends. THat would then be the legal difference.
I am just assuming though.
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My Bad...... That could just be the wrong word being used...... Or now, with the whole crazy mortgage crisis, I imagine it's possible that people are using shylocks & sharks instead of banks or friends. THat would then be the legal difference.
I am just assuming though.
well, he did say he was going for an FHA? mortgage. as far as i know, he did deposit my check..in fact, he should've had to, as it was written to his name. as far as the mortgage company knows, i gave him that money.
i think i'm going to put together a letter on company letterhead, and send that to him. that hopefully will cut the ice.
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Whoa !!!!!
At what point did the lender have a need to know where the G came from?
When getting a mortgage, I didn't realize that one had to divulge where his down payment, or "processing fee" had to come from.
We do financing (through Citi Finincial) here at my work, and we will not process the paperwork without a $100 down payment.
We do not ask where that $100 comes from
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That one sounds funny to me.
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Maybe the mortgage company is a little less then above water...... :uhoh
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actually this type of prying comes from something you are all not thinking of. these types of challenges are becoming more and more predominant since the federal government has made it a point to start seizing ownership of any property used for or obtained from funds even partially derived from ill-gotten gains (drugs being the most predominate form).
if they loan your brother the money to by the home and it comes out that the money you gave him was from an illegal source, the feds could and will seize his home and the funding company is generally beat out on any monies owed to them for it.
but if they prove to the courts by a proponderance of evidence that they showed all reasonable due diligence in ensuring that all proceeds were legally obtained and accountted for in a legal fashion (all taxes paid) then they stand a much better chance of recovering most if not all of the value of the property should it ever be siezed.
cap by you showing that you had the means to earn the money and that it would be a reasonable amount of money for you to possess then it is unlikely that this sum was derived by illegal methods.
dont give up account info, but you can give them a copy of your business licence that was issued by the state along with a notorized statement on company letter head from you stating that you legally earned and gave to your brother the monies in question. that should be all that they require.
FLOTSOM
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I've been thinking hard on this. I've listened to the Dave Ramsey show and a similar situation came up. I can't recall the details but it has something to do with Fraud. I may be wrong but I think the thing is all lenders have to exposed.
You may want to call another mortgage company and ask them about it. Or call a realtor.
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All you really need to do is send the mortgage lender a letter stating the money is a gift. Since it is less than 10k there are no taxes.
After your brother closes, shake him down for the money.
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This has been around forever. Some people lend the money to family and the buyer says it was a gift. When it is time to collect the loan and the family member sues and wins, a lean can be put on the home. The statement protects the buyer and the mortgage company. If there is a lean on the house and the house goes to forclosure....... The mortgage company has to pay the "loan" to get rid of the lean to resell house.
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well, he did say he was going for an FHA? mortgage. as far as i know, he did deposit my check..in fact, he should've had to, as it was written to his name. as far as the mortgage company knows, i gave him that money.
i think i'm going to put together a letter on company letterhead, and send that to him. that hopefully will cut the ice.
If he paid it from his account you need to do absolutly nothing.
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The answer to this was posted on another forum where CAP1 posted this question, so I thought I'd share the answer with all of you as seeing it didn't make sense to me either until this guy, who owns a mortgage company explained it.
This is called "sourcing and seasoning funds" and it is absolutely required, no exceptions these days. They may demand the past 2 months full bank account statements, documentation that you own the company, and the written / signed terms of the loan you have extended including the payment and term. They may also require a corporate resolution showing that you have corporate authority to extend the loan or documentation that you are the sole shareholder in the company.
A year ago none of this would have been required. But today.... its a disaster. Lenders underwriting, particularly in declining markets like Florida, are digging deep for any reason they can come up with to deny a loan. In fact, I would not be surprised at all if they use the fact that he needs to borrow funds in order to close as a reason for denial. Expect to have whatever documentation you submit to them highly scrutinized and they will probably come back asking for more and there is a good chance what they ask for will be impossible to provide. They will know this before they request it... the impossibility will be exactly why they request what they do.
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its to stop you borrowing money, then using that as a deposit to borrow more, then use that as a deposit to borrow even more... This is the kind of regulation in the credit market people have been talking about to avoid another credit crisis.
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For years, Mortgage companies look at past Bank Statements for many reasons. 1 is to see if there has been a large deposit seeing some people give or borrow for downpayments. if the Bank see's a large deposit out of the blue, they may question it.