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Can a lender ask you for documents pertaining to your primary home purchase if they did the refi on your investment property?

We recently did a cash out refi on our rental property. We used the funds for a down payment on a primary home. The bank that did the refi is now requesting a lot of information from us about our new home because they say they need that to sell our loan. Are we required to send them the details of our new home purchase? It seems to me that they would be able to access any information necessary themselves to sell the loan? We have no vested interest in them selling our loan out either so it feels like we are being asked to do their legwork for them for something we don't want. by clumzychick533 from , California. 13 days ago Reply


Justin Brown (justin_900_440)
#5 ranked lender in California - 23 contributions

If you didnt disclose to them the purpose of the cash out was to purchase a new property then it might be an issue if you dont provide the info.If you did disclose it and they didnt get what they needed then they made a mistake, and i would still send them what they need regardless, they cant change anything on the loan you took out, but you should still send them what they need to sell the loan.

13 days ago
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,628 contributions

One of the documents you signed when you did your refinance is called a "Compliance Agreement".. This document signed by you states that you will help the lender after closing to correct errors in the documents at the lenders request. This is meant to only apply to clerical errors so that the loan will meet requirements from Fannie Mae or FHA,etc.. so they can sell the loan..Typically, on a cash out refinance, they ask you to write a letter stating your purpose with the cash out funds.. If you stated you were going to purchase a new primary residence, then it's possible the lender would have made you go under contract on a new purchase and do a simultaneous closing. If you stated something different, or if you were never asked for this letter, then it could be an issue. Also, you acknowledged that you understand that the loan could be sold off at any time.. but don't confuse a loan being sold vs. a loan servicing being transferred.. All conforming loans are sold off to Fannie/Freddie/Ginnie.. These are the clearing houses which facilitate the secularization of mortgage loans so investors can purchase bonds which allow them to share in the interest generated by these loans.. so the end owner of the loan would be Fannie/Freddie or Ginnie.. but the company you make your payments too (loan servicing agent) can change.. Compliance Agreement:Document signed by the borrowers stating that they will help the lender after closing to correct errors in the documents at the lenders request. This is meant to only apply to clerical errors so that the loan will meet requirements from Fannie Mae or FHA, et

12 days ago
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Larry Gray (lgray_312_247)
#1 ranked lender in California - 1,075 contributions

If you signed the compliance agreement to indicate you understand the loan will be sold then you should cooperate with them. In helping them, which sometimes is needed after a loan has funded, you are doing the right thing for all concerned.Most loan originators who fund loans with their own money primarily, sell those loans. I have heard on average they keep 10% of their loans. Most big banks are the exception as they keep a far greater number of their loans even when selling a lot of them to fannie mae or Freddie mac. That is because they have the large department to properly service the loans and fannie or Freddie have no desire to get into the loan servicing business. We occasionally sell loans directly to fannie mae or Freddie mac just as the big banks do but utilize and independent servicing company (non bank), as we are not equipped to properly service them all. If your loan is sold to Wells Fargo, PennyMac, Chase, or a whole host of other large servicers you likely will be better served than to remain with the loan originator.

11 days ago
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