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Can lender ask for documents on an asset that had nothing to do with funds verified/used for close? 6 wks after close and funding?

by coscopper631 from Gig Harbor, Washington. Aug 3rd 2015 Reply


Christopher Stancato (Kyle Stancato)
#6 ranked lender in Washington - 59 contributions

I would not respond to it. I would call my original loan officer and ask him/her what is up. Especially post closing. Kyle Stancato here in University Place Wa. Bayview Home Loans

Aug 3rd 2015
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Lorne Harvey (lorneharvey)
#1 ranked lender in Washington - 418 contributions

This sounds like an asset that has had a transfer out of funds to another account that was used for the funds to close. The investor is probably the one asking for it before they will purchase the loan from the originating lender. At closing the borrower signed a compliance agreement where the borrower agreed to help with post closing audits, etc. I would give them what they are asking for if it were me.

Aug 3rd 2015
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Michael Patterson (MichaelPatterson)
#55 ranked lender in Washington - 71 contributions

My recommendation would be to go back to the loan officer as Christopher mentioned to get clarification as to exactly why additional documentation is needed. If your loan is being sold to an investor and something came up in a QC Audit of that loan package, it's possible that the lender may have missed something. Without knowing the details it sounds like they may have not properly documented an asset... for instance, maybe liquid reserves that were needed to qualify for the loan if it's not something that needed to be verified as funds to close. It sounds like an error in underwriting and if it's 6 weeks after closing, it is most likely coming up while they are trying to sell the conventional loan or to meet HUD Guidelines so they will insure the gov't loan. Lorne is also correct that a compliance agreement document is usually included in your final loan documents so if there is an error made, the borrowers agree to help the lender by correcting any errors. I suppose honest mistakes can happen, especially when people are rushing at the end. We don't hear of this happening often though. Without knowing specifics, we are of course all speculating, so I'd go back to your originating loan officer. ;)

Aug 3rd 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,797 contributions

Yes.. the lender can ask, and you also sign a document when you closed on your loan that stated you would cooperate if the lender comes back to you for additional documentation after the close. But there's no need to worry.. Unless you have committed loan fraud, anything you provided would not cause your lender to call your note due.. I would give them what they want so they will go away.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Aug 4th 2015
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Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

Call the loan officer, if any post closing verification's are being asked for they will know about it. It could be a situation where the service did an audit and has found something they want more information on.

Aug 4th 2015
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Thank you, Gentlemen. Due to number of character constraints in the initial question text box I was unable to provide details of the asset in question.The asset I referred to is my former home. It has been under contract... and will likely be under contract for a while yet due to a severe back up of appraisal appts. in Oregon.Yesterday I learned they are at least 7 weeks behind. As of today, no word on scheduled appraisal by the buyers' lender.No money came from the house for closing costs because the house has not sold. All funds for close were from mutual funds I cashed out. All appropriate documentation of the money trail was provided, three times.My question to my lender continues to be "how can I show you that funds for close came from the sale of my former house if that house has not yet sold?" I have not received an explanation. Simply, "the investor needs it."It is my non-expertise assumption that to provide a "property tax statement, and proof of homeowner's insurance" as evidence where my close funds came from... for a property that has produced no money... is an act of fraud. Especially since the close money did not come from the asset in question. Further, why the inconsistency? If I received money from the property for close funds, why did the lender not also ask for appropriate bank statements -- as they did with the deposits from my mutual funds to my bank account? This question continues to be stonewalled by the lender.Other than listing the property on the loan disclosure form, I was told I qualified for the loan in spite of that liability in my debt ratio. I see as I sort through uploads of documents to the lender that I have in fact previously provided them with proof of insurance and property tax information for my former home.I'm a 100%, permanently disabled veteran. I was granted a VA loan for my new home's purchase. The seller had a USDA loan on the house. I was told by all parties involved that due to the USDA and the VA there were far more stringent requirements for verification of all matters prior to close.Which is what fuels my current agitation with the demand for documentation on my old home. I freely acknowledge signing the compliance agreement to help the lender correct any mistakes. Yet I have not received explanation or admittance of any mistakes. Simply -- this is what the investor needs.I'd at least appreciate the honest admittance that someone goofed during the application stage and/or underwriting stage. Even my loan officer is mystified and says so in print. Both the realtor for my old property, and the realtor for my new property ask -- how could you have purchased the new home if they required your closing cost money to come from the sale of the former home?There you have it. Another tale of woe from a homeowner after close on mortgage.Thank you in advance for any further insight.Cathleen Shea

Aug 4th 2015
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I swear there were paragraphs in the post when I crafted it. Doggone it!At any rate. Also checked in with the VA Regional Loan Center in Denver. They said there's no way to provide a document of something that doesn't exist yet, or has not happened yet. To do so would be to at the very least assist in the commission of a fraud.The house hasn't sold. Period. If the underwriter assumed that was where the money came from, and it didn't... nothing I can do to correct THEIR mistake. I submitted all requested documents to show where the close money came from.I could send them a copy of the sale contract on the house. That's the best I could do to... assist them in fixing THEIR mistake.

Aug 4th 2015
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Derick Condron (rightstartoregon)
#33 ranked lender in Oregon - 597 contributions

Cathleen this sounds like there was either an error by an Underwriter in how they calculated your ratios or reserves required on the new property and or a miss representation by the LO on how they stated assets you had on the 1003. I would maybe try asking the title company on your old home for an estimated HUD1 statement to show the funds you will receive on that transaction. Not being in the situation fully and seeing all the moving parts it is very hard to say 100% what the post funding conditions are a part of.

Aug 4th 2015
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Lorne Harvey (lorneharvey)
#1 ranked lender in Washington - 418 contributions

It sounds to me like you qualified for both homes with your current income. There may be a reserve requirement that the investor is needing to meet, thus the copy of the final settlement statement, which is not yet available. If your loan officer does not know the reason that is strange, because he or she would have a post closing person asking the loan officer to contact you and should be able to provide an explanation as to why they need your final HUD. We are all a bit stumped over this one.

Aug 4th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,797 contributions

I'm pretty sure that your underwriter definitely missed something.. Typically, your lender would have asked for a HUD-1 on your exiting property to verify the funds you were using for down payment.. and you would have needed to close on that property prior to you completing the purchase on your new home.. if they didn't ask for the HUD-1, then someone messed up.. and now they are trying to fix it.. give them what they ask for, and continue to be honest about it.. if it becomes a real nuisance, then I would call the loan officers manager and talk directly to the person in charge.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Aug 4th 2015
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Thank you, Everyone. Apparently Amerisave Mortgagage Corp. has a bad habit of not returning calls or emails put to supervisors, managers, etc. This as evidenced by my phone messages and emails to the "loan purchase team leader" going unanswered. I know she is in because the secretaries have verified her presence. However, I always get dumped into voice mail. No live humans.The only person continuing to respond, via email only, is the dubious Ms. Taylor. And that only until 3 pm (EDT) each day.Seems to me asking a title officer to supply a number on a HUD form that has not be validated via appraisal would be something they'd refuse. I'll call them, but if it were me, no way would I put my license out there for such a speculative number in this volatile market. Especially since there is still negotiation going on for who will pay for the approx. $15000 needed new roof. Which would obviously impact the earnings from the future home sale.The VA Regional Loan Office was very clear. I cannot provide the lender with documents and number values that do not yet exist. Would that I had found any of your all's contact information before I waded into this mess. :)

Aug 4th 2015
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Lorne Harvey (lorneharvey)
#1 ranked lender in Washington - 418 contributions

We as loan officers hear about borrowers using internet or long distance companies for various reasons, and we all cringe. I think we would all agree that as borrowers, we should all be able to set down at the loan officers desk and deal face to face. It just makes things much smoother, and typically trying to save maybe a eighth of a point and go long distance is definitely not worth it! Just my 2 cents... :)

Aug 4th 2015
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Wise counsel, Lorne. Funny thing is, the normally competent face to face guy I'd used for a remodeling refinance loan, suddenly couldn't figure out how to work a VA loan request and after six weeks of fiddling around... he told me the VA said I was ineligible for VA loans. Wow! Two other local lenders, one of whom said they would not loan money below 70K... my new home only required borrowing 66K, and the other who decided my debt ratio, that the VA had already verified was ok for a VA loan, was too high and "no other lender would touch me, either." Double wow!Which trigged my severe PTSD symptoms so badly that I didn't want to try getting kicked in the teeth by anyone else here in the Northwest. My issue, I know. But that's how I landed in this mess.Next time I decide to move to yet another "dream house" :) ...I'll come hunt down one of you guys to get the loan done right! :)

Aug 4th 2015
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Lorne Harvey (lorneharvey)
#1 ranked lender in Washington - 418 contributions

Thank you, I completely understand. It is always best to get a referral to a loan officer who has a proven track record of closing, and on time. One of the best ways to find a competent loan officer is to call around and poll the local realtors.We are all here to help guide our borrowers!! Glad you found this site!

Aug 4th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,446 contributions

Yes, no, and maybe.... There is too much information missing to give a good answer. Then, as it is after closing, you technically have a closed loan and really don't need to do anything. You will still have and keep your loan. With that said, it means something was not underwritten correctly, and they are trying to get it corrected after closing. It won't hurt you, but if can be a big financial disaster to the lender. If it isn't a big deal, I would say go ahead and provide the document to assist your loan officer.

Aug 5th 2015
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Hi Joe, thank you for responding to my question. // The thing that mortgage company is asking me to do is to say "the close money came specifically from the sale of my former home." Which, to date, is under contract, but no sign yet of a definite close due to appraisal backups. // Funny thing is... they asked for and received several rounds of documents to show my close funds actually came from cashing out my own mutual funds. // I sat down and finally got my head clear enough to read through word for word every single page of my closing package. Has any other human, including the blinkers in UW and post-close ever done so??? I wonder. // The Universal Residential Loan Application, in section 2, has a block that says... Source of Down Payment, Settlement Charges, and/or Financing (explain). The company wrote in "checking savings, stocks and bonds, equity on pending sale." Well, can we apply the "and/or" statement to one of those three items in the set? Or, now I wonder... does it only apply to the items in the instruction list itself. Sheessshhhh. No wonder lawyers get paid so much. // Regardless, these folks also wrote the cut off amount I was to receive in proceeds on my house sale. How could they possibly know what the outcome of contract negotiations would be? I can tell them flat out, due to needing to buy a new roof for the nice buyers... I won't be getting a minimum of 42K. // Head spinning yet for all the inconsistencies put in place by the lender? How can I fix any of that for them? Like the VA Loan Center gentleman said... any attempt by you to represent that your close money came from anywhere other than the source it did... after the fact... is to commit fraud in the eyes of the VA. // Come and get me Amerisave. I'll be the disgruntled disabled veteran with a long line of supporters standing behind me waiting to help you all figure out how to do your job right, the last time!

Aug 5th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,446 contributions

OK, that explains a lot... So does apparently who you used for a lender. Those sort. It would appear to me that they screwed up. You ALWAYS need to prove and document your source of cash to close. If you cashed out an account, that is fine. But you need to prove it and paper trail it. If you documented all the money, including cashing out an account, in the bank WITHOUT the sale of the house, that should be sufficient. BUT, maybe you needed some MORE MONEY to meet reserves requirements that would have come from the sale that they missed, and are now trying to fix. If whatever it is isn't fixed, and it sounds like it won't be for now, they will not be able to get VA insurance on the loan, and will likely have to sell it for a loss on the mortgage scratch and dent market. If your application was honest, and they made a mistake that can not be fixed, it is their fault and their issue - not yours. Once it is closed, it is closed.

Aug 5th 2015
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Hi Joe. If we ever move to Minnesota. I'm calling you to handle our loan. :) I didn't even have to cash out my entire mutual fund account to get the necessary funds for the close. And no more money was needed from any other source. The paper trail for the money was paved with multiple copies of various statements. // The comedy of all of this, to me, is that the loan amount was only $66K. Of course the lender must fear for the solidness of the loan in 20 to 30 years. If my former home wasn't under contract right now, I'd understand. Or not. If they think I'm going to be paying them interest in even 15 years... bummer. // I learned what might explain how Amerisave was able to get an appraisal scheduled so quickly for this new home, while I'm waiting forever on the buyers' lender and an appraisal for my old home. Seems Amerisave got in trouble last year with the CFPB for providing their own appraisers via a sister company, and other assorted ethics issues. Oops! I'd guess the 20 million in fines didn't cure them of such practices. // I should be happy it got me into the home I wanted in such short order... but I'll remember this lesson forever regarding their lack of ethics and attempt to put the burden on me for a mistake I could NEVER have caused. // Happy lending! :)

Aug 5th 2015
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Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 534 contributions

I doubt seriously that the lender can call the note due. If anything it would be there fault. I used to work for a lender and it does happen where underwriters miss information. It is always good to try and help the lender out for many reasons. One is we want to keep lenders in business. If lenders are missing a piece of info post close then their audit team may catch it or the lender who is buying that loan like a Wells Fargo or other servicing company. They will require the document or the lender has to buy the loan back for pennies on the dollar. If you get too many of these then you risk eventually going out of business. The way I look at it is we are all human and all make mistakes. So try and help the lender out. But go thru your broker and get their opinion. You many thing it has nothing to do with funds verified but if it is somehow linked to any other funds that were not used for closing it would still be needed. All funds have to be verified over and beyond what is needed to close. Good luck to you - Mark 303-955-5606

Aug 6th 2015
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It's funny how quickly a phantom supervisor will call when one CC's the company president on an email. // She still felt there was no need for me to have a copy of the key closing documents that had been changed by the UWs. // Me... why do I not need copies of the changed documents? // Her... Well, because it was all internal changes. // Me... These are closing documents that changed. We entered into a legal contract. You changed the contract. My lawyer seems to think it's smart for me to have the corrected documents for my records. // Her... You said you wanted to those sent via US Mail? // Thank you all for your thoughts and support. Wish I'd dug deeper than the surface review I settled for in choosing Amerisave Mortgage Corporation. Next time I'll come here to Lender411 before making any lender decisions.

Aug 7th 2015
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