Plattsburgh Mortgage News: Never Lie to Your Loan Officer Because Every Statement is Verified!

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

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!!!

 

Christopher Ohlsen

37 Boynton Ave

(845) 243-5293 (Office)

(518) 565-0799 (Cell)

www.plattsburghmortgage.net

chris.ohlsen@guaranteedrate.com

 

 

Comment balloon 66 commentsChristopher Ohlsen • July 16 2014 09:30AM

Comments

You are absolutely right, just be honest from the very beginning.  As an agent I tell them that proof of funds are needed and everything will be verified.  If I see them getting upset or annoyed at the process then that's a big red flag! Great post

Posted by Alexa Sanchez, Realtor Extraordinaire about 4 years ago

Thanks Alexa! Yes, this would have been a much easier process if they just told the truth about having made the deposit when they said they did. If they had been honest from the beginning they would be enjoying their new home now instead of bitterly spreading rumors around town.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

I don't even write offers anymore unless the funds are in the bank.  Big fat waste of time.  And frankly it needs to be in the bank prior to the two months of bank statements loan officers collect.  

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) about 4 years ago

Tammy, that is the way that I prefer it. Most of our client's do have seasoned funds in their account at the time of application. In this case they were a young couple that I wanted to help out and it was a referral from an agent that always sends us a lot of business. I also know the listing agent who told me that she has been having trouble attracting buyers to this particular listing and that it has been on the market close to a year. I DID emphasize the importance to them of making the deposit but this DID end up being a big waste of time. Lesson Learned!! 

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

The article is a little too long for me to read word-for-word, but from the gist of it buyers are liars in this case.  I wonder what was their "behind your back" conversations they had with themselves?  Maybe they thought the didn't need a down-payment because they watched some TV info-mercial at 3:00 AM which suggested otherwise?  LOL

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 4 years ago

lol, thanks Carla; I know that I can be long winded sometimes. I think in some instances they were just trying to cut corners; like when they told me that their was no court order in place. In another instance I think that they maybe thought that I wouldn't check up on it!?!? Because at one point, after they told me they made the deposit, one of the borrowers sent me a screenshot of his phone bank app showing the right amount of funds. I told him that I would not be able to use that screenshot but that I would need a statement. He told me his statement wouldn't be issued until July 1st, which I already knew but I regularly get signed printouts from banks and every transaction is dated; he later told me that he didn't think it had to stay in his account so he spent it with the intention of replacing it before July 1st... When it came time to collect conditions it just seemed like they were trying to get away with whatever they could... At one point they even looked up some guidelines on their own and contacted me back telling me of their research and insisted that I didn't need the information that I was asking them for (pertaining to repayment type of student loans) I can't (age) discriminate in my position but personally I feel that it speaks to their level of maturity. I think I know what they were trying to do but I'd of loved to be a fly on the wall for some of those conversations too. Also, they didn't need a down payment because this was a USDA Rural Housing loan but they needed to bring about $1100 to the closing table after the 6% seller concessions for closing costs (Taxes, insurance, title, etc.)

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Chris, I appreciate the big caps pertaining to you not discriminating! It sounds like you did a fine job handling the situation, and I empathize with you over it not working out.  But, you pursued it just as well as you could have, and I am sure that the referring agent appreciates all the hard work that you put in!  So no direct payoff to be had, but you did the right thing, and that reflection on your character will only help you moving forward.

Posted by D M about 4 years ago

Thanks Drew, I kept the referring agent and the listing agent in the loop every step of the way. I think that the buyer's agent knows that I did everything I could and put in a lot of extra effort to help this couple. She became a bit frustrated with them as well and explained to them via email (I was CC'd) that random above average sized deposits need to be sourced as a provision of The Patriot Act, especially when working with unseasoned funds. She broke it down for them and explained that people used to launder funds through real estate and as a measure to stop that the government requires that we know where all of the money that they are using to purchase real estate comes from. The outcome was a bit frustrating but I do believe that both agents involved know that I went the extra mile and was willing to put in the extra work required to get this closed; just needed some cooperation from the buyers.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

It sounds like one big giant headache for you. So much for trying to help them - the road to hell...

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) about 4 years ago

Hi Christopher,

 

It is maddening when a client tries to hid the truth (I won't call them a liar either :-) ).  Carnage erupts when full-disclosure is not practice.  But I have learned that repitition is key to my sanity - things must be repeated again and again so that it is truly understood how "innocent" omissions can put someone's dream house on hold.

Posted by Lee Davenport, Learn With Lee: Real Estate Coaching & Consulting about 4 years ago

Christopher, you sound like an honest loan officer and did everything possible with these buyers to help them get a mortgage loan. Like Tammy comment #3, it is good practice to ask/require proof of funds to close when working with home buyers. Sounds like the situtation in your case, though, was a little touchy. When we list and market homes for sale for home sellers, we require agents to provide their buyer's proof of funds to close, or their offer will not be considered.  

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) about 4 years ago

Oh Gee! Do people think lenders are just supposed to take your word for it? From your description, this screams mostly lack of maturity. Such a frustration to not even be paid for it in the end.

 

Posted by Dale Samples, REALTOR -Homes for Sale Charleston, West Virgini (304.741.4705 • www.dalesamples.com ) about 4 years ago

Honesty is the best policy nothing ever good comes from not being truthful. Great post thanks for sharing.

Posted by Pat Champion, Call the "CHAMPION" for all your real estate needs (Coldwell Banker Camelot Realty) about 4 years ago

I guess over time there were enough people that got away with misrepresenting their resumes, degrees, numbers and so on, that some feel they can try it. 

Posted by Olga Simoncelli, CONSULTANT, Real Estate Services & Risk Management (Veritas Prime, LLC dba Veritas Prime Real Estate) about 4 years ago

Jill, yeah it definitely has been a challenge dealing with these people. Like I said at the end of the post; I am glad to put them far back in the rear view.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Lee, absolutely! Sometimes people do need to hear things again and again for it to sink in.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Pamela, I really appreciate that! I have always strived to be up front and honest with my clients and people in general. I said from day one with this couple that everything has to be documented. I also told them that once I submit the first round of conditions that I may be asked for more. They seemed to fully understand and indicated that they would work with me to get whatever I needed. That said, they put down a $500 EMD and needed so little at closing that one paycheck from each of them would have covered it. I did recieve a screenshot of his phone showing funds in the account. I told them more than once that it needed to be in there ASAP so I feel that when he told me that he didn't know that it had to stay in there that was BS... I think that he thought he could get away with spending and replacing it since the statement wouldn't be issued until the 1st of July but I did tell them that it had to be seasoned... And again, transaction and dated and we verify and document EVERYTHING! I agree with you going forward though; from here on out I will not issue a pre-approval unless all funds are already in their bank account when I collect the initial 2 months bank statements... even if it is just a couple paychecks worth!

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Dale, it really was frustrating especially toward the end. The false information about the child suppport court order, the deposit not being where it should have been based on their word, the mis-statement about his hours being cut due to a slow season... Was worse than pulling teeth as the old addage goes. Not only did we not get paid, our agents were unable to close the transaction, and I put a lot more work into this one and every other loan file this month than every other loan was much bigger. Great lesson for me though and at least a got a featured post on AR out of the experience:)

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Absolutely Pat, Honesty is always the best policy. Holds true today as it ever has!!

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Very true Olga, remember the "no docs" and "stated"  loans?...lol. Maybe those were the old guidelines that they read reading about when they were doing their "research" that they used to challenge me on whether or not I needed the conditions from them that I was asking for...lol.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

I feel your pain, Christopher.

Posted by Raymond Denton, Simple Man (Academy Mortgage Corporation) about 4 years ago

Thanks Raymond! Luckily this one was the small one in the bunch. I appreciate every single referral though no matter the size. This is a very young couple and maybe it is best for them that they got out of it. I offered to work out an extension for them and essentially begin from the beginning again. That is when I was fed the line about the cut in hours; maybe they realized that they were not ready for homeownership after they were already under a legally binding contract and just needed a way out. Whatever their reasons I am glad to be done with it :)

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Feel the pain also, if we just knew at the beginning of certain situations to go in a different directions, how much more simpler life would be!

Posted by Pete Xavier, Outstanding Agent Referrals-Nationwide (Investments to Luxury) about 4 years ago

For sure Pete, If I had known that I was going to spend so much time working on this file with this end result I would have denied them for lack of assets at the time of application. Even though it was only $1100 bucks and collectively they earn more than that per pay period... Once again though, lesson learned. From now on it doesn't matter how little needs to be brought it needs to be in the account at time of application or at least prior to me issuing a pre-approval.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Oh my = this sounds like a big mess.  It is so important for buyers to understand that everything must be documented, sourced and seasoned.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) about 4 years ago

That's important advice for home buyers, looking to obtain a new mortgage, Chris.  And, I've found if some information is found to be false during the verification process, it gives the lender more cause to dig even deeper!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) about 4 years ago

Lying in life and in business always comes back to you.

 

 Love and light, 

 

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) about 4 years ago

Hi, Christopher,

You mentioned that they have student loan debt. I wonder how honestly they filled out the loan applications for those loans?

When they apply for a job, I wonder if they expect to fill out the job application truthfully? I wonder what their resumes look like?

 

These young people are headed down a tough road and I suspect that they will be blaming others when they run into difficulty.

 

Sigh…

 

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 4 years ago

True,

what is the point if you'll need to provide all financial documents after all.

I just lost a buyer of my listing, he lied that he filed tax return, but he did not. His lender did not verify and gave him PQ based on the phone conversation. Pathetic..

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) about 4 years ago

I always advice buyers never to lie on their loan application . 

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 4 years ago

Oh gosh, how frustrating.  Yes, people need to be honest.  The funds need to be verified.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) about 4 years ago

Oh, what a mess.  Obviously those buyers have some maturing to do -- lying, not paying attention to a professional's advice, etc., is the wrong way to go.  

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, 914-419-0270, kat@thehousekat.com) about 4 years ago

Hook up the polygraph... finger sleeve, arm band Velcro and electrode circle band aids. Where were you on the night of the 32nd line of questioning to see if deserving of credit, the risk of a mortgage. Going in, after the clear to close instructions get smoke signaled to the title company too.

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) about 4 years ago

Trying to hide information like that from your mortgage company is futile. They will find out! You can't cheat them now a days. 

Posted by Suzanne Otto, Your Montgomery County PA home stager (Six Twenty Designs) about 4 years ago

Joan - Yes, it is important for everyone to understand that everything is documented and that funds need to be sourced and seasoned as you mentioned. Sometimes we can get by without seasoned funds but in those instances every single little deposit in the account needs to be sourced and that creates a lot of extra work.

Myrl - Very true! Once I learned that they didn't make the deposit when they said they did and instead made three deposits after I obtained the prinout I sourced those three. I submitted them and was given another batch of conditions almost as numerous as the first round.

Laura - It always does! I have found that honesty is always the best policy; not only in business but in life as well. Just like Doctor Phil says "Winner's deal in truth(s)"

John - Student loans are much easier to obtain than a mortgage but you make a great point. How far will they get in life if they are being dishonest in an effort to cut corners?

Inna - I know! I emphasized after I learned that they did not make the deposit when they told me that they did that every transaction is dated. It's not like I wouldn't have known that the funds were not seasoned! It seemed that they were trying to sneak the money back into their account last minute. I hope that they learned their lesson for next time around when they really are ready to buy a home.

Gita - Same here. I mean it is pretty much a given and I don't want to offend people but I did make it very clear in the beginning that everything would be documented and that after I submit the first round of conditions I may be asked for more.

Kat - Yes, they certainly do. I was worried that their behavior could potential damage the referr relationships that I have with the two agents involved as well. However, I think that they both understand the situation and how everything occurred.

Andrew - lol, great sense of humor. True that there are many lines of questioning on the motgage application. People joke all the time when they come in to sign disclosure that they feel like they are signing away rights to their first born. Just the world we live in that everything needs to be verified and documented.

Suzanne - True; that is why we have borrowers sign the appropriate authorizations in the disclosure package. We can't just take their word for it! If it worked that way we'd be seeing many more defaults than we have and already do.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

The best approach is...I need your help and this is what we are up against...What can be done? This approach never fails....NEVER

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 4 years ago

It's amazing how many people continue to try to commit some form of loan fraud these days. Maybe they've never heard of the FBI?

Posted by Jeff Pearl, Full Service Full Time Realtor (RE/MAX Distinctive / LIC in VA) about 4 years ago

Christopher, thanks for sharing, I will definitely do my best to stress the importance of tell the truth on all these doc. 

All we c do is our best and as long as we stress to these clients that the bank verify all the information; we can say we did our best.

 

Posted by Stacy Ann Stephens, Realtor, New Haven & Hartford CT Homes For Sale (Keller Williams Realty CT - 860-704-9070) about 4 years ago

True Richie. In this case I was somewhat caught off guard when it came to light that the deposit hadn't been made. I saw the screenshot, though I couldn't use it, but I believed the money was where I was told it was and when it wasn't I was not only friendly in the way that I told them what I needed but I offered to obtain most of it with the proper signed authorizations. I also prepared them for the fact that I may be asked for more after the initial submission of conditions and I was surprised at their hostility when I actually did have to ask for more. 

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

It amazes me that in this age of instant everything that the younger generation would fail to grasp this?  Yikes. 

Posted by Paula McDonald, Magnolia Realty ~ Granbury, TX 936-203-0279 (Magnolia Realty ~ Granbury) about 4 years ago

Jeff - I know, the buyer's agent did not want me to issue a denial letter either because these people represented one thing and then presented with another. The buyer's agent did use terms like "Fraud", "Sue", and "Specific Permformance" when they began telling us lies about hours being cut. In the end though it wasn't worth the hassle and my bank agreed to issue a denial letter.

Stacy - Yep, the best is all that we can do. I appreciate the fact that you will stress the importance of telling the truth to the bank. Aything less is a big waste of time because we are not in a position to just take their word for it; we need to verify and document everything!

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

I know Paula, reading your comment almost makes me laugh. They should know growing up in this era how very simple it is for us to obtain information. It's not like we can't simply verify their statements; especially with signed authorizations that are a part of every disclosure package.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

Nice post. Tell us the truth and the whole truth! If there is a way to navigate the potholes in your scenario, we will be much better able to create the strategy than you will!

Posted by Matt Brady, Lending With Competence And Character (Skyline Home Loans) about 4 years ago

You nailed it Matt! What I tried to impress upon them is that I was working for them. When they were unable to get me cancelled checks for the child support deposits I asked if I could get a signed authorization from the mother to A. obtain a copy of the support order and B. get a prinout of her bank account statements. This would have allowed us to show the money leaving her account and entering into the borrower's account which, if he was telling the truth about where the money was coming from, would have correspond with the court order. If we could have gotten those deposits sourced there is a chance that I could have gotten one LOX approved for the sale of items on craigslist; but no way we were going to be able to use LOX for all of the deposits. I got no cooperation though and they got mad at me for asking them to assist them in finding a work-around to get the conditions cleared.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

I wish I had a dollar for every time a borrower told me info verbally which never panned out when the time came to produce the paperwork.  Bank statements dont lie but people do

Posted by Randy Mitchelson, APR, First Impressions are made at First Click (iPartnerMedia.com #goipm & Homeland Heroes Home Loans) about 4 years ago

Randy, I ran into that a lot more back in the old subprime days but no so much now-a-days. I think that people have gotten used to some of the provisions in The Patriot Act and know that they won't get away with lying on a loan application. Still, you're right that people do sometimes lie as I encountered that again here first hand. 

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (RE/MAX Executive | Charlotte, NC) about 4 years ago

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

Posted by Jennifer Ferri (Title Junction, LLC) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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

Posted by Jeff Jensen (The Federal Savings Bank/Lending in 50 states) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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". 

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) about 4 years ago

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!

Posted by Gerard Gilbers, Your Marketing Master (Higher Authority Markeing) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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

Posted by Adam R. Cohn, We actually get mortgages closed FAST! (STANDARD MORTGAGE CO.) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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.

Posted by Carla Freund, Raleigh - Cary Triangle Real Estate 919-602-8489 (Keller Williams Preferred Realty) about 4 years ago

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.

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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

Posted by Michael Dagner, Your Denver Homes Realty Expert (Brokers Guild Classic) about 4 years ago

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 :)

Posted by Christopher Ohlsen (Credit Werx, LLC.) about 4 years ago

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.

Posted by Craig Hatcher (Georgia Residential Realty, LLC) about 4 years ago

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.

Posted by Diana White-Pettis, GRI, CDPE, CNE, WHC Upper Marlboro Homes for Sale (Bennett Realty Solutions) about 4 years ago

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.

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