Comments on: A How To Guide For Using Gift Sourced Funds In FHA Loans http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/ The Unofficial Guide to FHA Loans & Mortgages Tue, 17 May 2011 20:16:59 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Kathy http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-200305 Kathy Thu, 30 Sep 2010 18:18:32 +0000 http://www.fhaloanpros.com/?p=773#comment-200305 The "banker" is the one you should be disappointed with - not the process or the government. Mortgage fraud is rampant and underwriters are having to question more and more issues in loan files these days because borrowers, seller, builders, loan officers, etc. are not always telling the truth or providing all the details they should be providing up front. Underwriters have to be part detective these days to make sure that the loans they are approving are legitimate. But what you were eventually asked to provide - an unmarked bank statement to prove funds you were gifting to your sister - is the correct documentation needed for this situation. Even though your intentions, when marking out your source of direct deposits, appear honorable, you have to understand that the underwriter reviewing your loan doesn't know you from Adam and can't just assume that you're just protecting your personal information. It is so unfortunate that there are people out there that have ruined this process for the rest of us, but that is just the fact of this business these days. FHA has established certain guidelines that are to be followed to ensure that loans are based on honest and accurate information. Don't blame underwriters or government for requiring information that you should have been informed about upfront. The “banker” is the one you should be disappointed with – not the process or the government. Mortgage fraud is rampant and underwriters are having to question more and more issues in loan files these days because borrowers, seller, builders, loan officers, etc. are not always telling the truth or providing all the details they should be providing up front. Underwriters have to be part detective these days to make sure that the loans they are approving are legitimate. But what you were eventually asked to provide – an unmarked bank statement to prove funds you were gifting to your sister – is the correct documentation needed for this situation. Even though your intentions, when marking out your source of direct deposits, appear honorable, you have to understand that the underwriter reviewing your loan doesn’t know you from Adam and can’t just assume that you’re just protecting your personal information. It is so unfortunate that there are people out there that have ruined this process for the rest of us, but that is just the fact of this business these days. FHA has established certain guidelines that are to be followed to ensure that loans are based on honest and accurate information. Don’t blame underwriters or government for requiring information that you should have been informed about upfront.

]]> By: Sharon http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-122501 Sharon Sat, 19 Jun 2010 13:32:00 +0000 http://www.fhaloanpros.com/?p=773#comment-122501 This all sounds wonderful until you realize the intent the government has in investigating the "donor" sources of these "gift" funds. We gave a sister a check to help with closing costs on an FHA loan. We signed off on the Gift Letter stating none of this money was coming from the realtor, seller, etc. The Gift Letter even stated the criminal consequences of $5000 in penalties and jail time if this was a fraudulent act. We only gave her $1500! Nothing on the gift letter said the bank or government was going to investigate where the money came from through our bank statements. The bank our sister was dealing with said they would need a bank statement to prove availability of the funds. Our sister cashed the check, had the funds in her bank, and we could provide the front and back of the cashed check. The bank said they needed a copy of our recent bank statement. I provided that with names and sources of our employer's direct deposit blanked out - as that has nothing to do with this transaction and is nobody's business what we make! The bank said this was unacceptable as they were looking for any "unidentified" deposits. They were accusing us of fraud before a crime was committed! We were needing to prove ourselves innocent of a crime that hadn't even taken place. I refused to provide anymore information as the original request for documentation from the banker simply stated that they needed a copy of the bank statement "upon which the check was drawn," "to prove availability of the funds." What I provided did that. The banker said this statement with blanked-out information was rejected by the underwriters - and could I please provide a non-blanked-out copy of the statement because this is just a "little exercise" they have to go through. I told the banker that this was not a "little exercise" to us - that it is our private information and is nobody's business. If he was not forthright or clear in stating the bank's or government's intentions about how far they were going to go in investigating (accusing) the donor - who is just trying to be helpful to a sister and is not applying for this loan - then he would need to explain that to the underwriters himself as to why he was having a hard time getting the documentation he needed. I told him that if he suspected fraud, he should first go to the party which he suspected of providing the funds, and then come knocking on our door - because we'd already signed off on an extremely scary document stating we could be in for a $5000 penalty and jail time if we were committing fraud. Would we do that in order to be part of a scheme to give someone $1500? I don't think so. Amazingly, after that exchange, he found a different way to document the monetary gift. Do-Gooders, beware! (If only the government were so concerned in tracing political campaign monies....) This all sounds wonderful until you realize the intent the government has in investigating the “donor” sources of these “gift” funds. We gave a sister a check to help with closing costs on an FHA loan. We signed off on the Gift Letter stating none of this money was coming from the realtor, seller, etc. The Gift Letter even stated the criminal consequences of $5000 in penalties and jail time if this was a fraudulent act. We only gave her $1500!
Nothing on the gift letter said the bank or government was going to investigate where the money came from through our bank statements. The bank our sister was dealing with said they would need a bank statement to prove availability of the funds. Our sister cashed the check, had the funds in her bank, and we could provide the front and back of the cashed check. The bank said they needed a copy of our recent bank statement. I provided that with names and sources of our employer’s direct deposit blanked out – as that has nothing to do with this transaction and is nobody’s business what we make! The bank said this was unacceptable as they were looking for any “unidentified” deposits. They were accusing us of fraud before a crime was committed! We were needing to prove ourselves innocent of a crime that hadn’t even taken place.
I refused to provide anymore information as the original request for documentation from the banker simply stated that they needed a copy of the bank statement “upon which the check was drawn,” “to prove availability of the funds.” What I provided did that. The banker said this statement with blanked-out information was rejected by the underwriters – and could I please provide a non-blanked-out copy of the statement because this is just a “little exercise” they have to go through. I told the banker that this was not a “little exercise” to us – that it is our private information and is nobody’s business. If he was not forthright or clear in stating the bank’s or government’s intentions about how far they were going to go in investigating (accusing) the donor – who is just trying to be helpful to a sister and is not applying for this loan – then he would need to explain that to the underwriters himself as to why he was having a hard time getting the documentation he needed. I told him that if he suspected fraud, he should first go to the party which he suspected of providing the funds, and then come knocking on our door – because we’d already signed off on an extremely scary document stating we could be in for a $5000 penalty and jail time if we were committing fraud. Would we do that in order to be part of a scheme to give someone $1500? I don’t think so. Amazingly, after that exchange, he found a different way to document the monetary gift. Do-Gooders, beware! (If only the government were so concerned in tracing political campaign monies….)

]]> By: Connie http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-118549 Connie Thu, 10 Jun 2010 15:35:21 +0000 http://www.fhaloanpros.com/?p=773#comment-118549 can my first cousin be teh donor? can my first cousin be teh donor?

]]> By: almeida jones http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-77551 almeida jones Fri, 15 Jan 2010 17:39:14 +0000 http://www.fhaloanpros.com/?p=773#comment-77551 the lender we are working with wants the DONOR to source where he got the money from. QUESTION: if he got it from a family member and the family member provided a bankstament showing it came from their account... is this acceptable? the lender we are working with wants the DONOR to source where he got the money from.

QUESTION: if he got it from a family member and the family member provided a bankstament showing it came from their account…

is this acceptable?

]]> By: rendwick http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-42076 rendwick Mon, 16 Feb 2009 20:14:53 +0000 http://www.fhaloanpros.com/?p=773#comment-42076 If a person owns a house and a close relative wants to buy the house can the gift funds come from equity in the house? If a person owns a house and a close relative wants to buy the house can the gift funds come from equity in the house?

]]> By: Maricela http://www.fhaloanpros.com/2008/12/a-how-to-guide-for-using-gift-sourced-funds-in-fha-loans/#comment-33187 Maricela Thu, 25 Dec 2008 04:24:59 +0000 http://www.fhaloanpros.com/?p=773#comment-33187 Excellent, thanks! Excellent, thanks!

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