Verification of down payment, more California lender fraud?
When approving a loan, a prudent lender typically verifies the buyer's down payment and source. For instance if today my bank balance is $10,000 and tomorrow I deposit $100,000, the lender will want to know where the additional $100,000 came from... is it a loan? is it a gift? The lender typically verifies the average balance for a several month period. If I were borrowing $100,000 from my parents, and didn't want the lender to know that the money was borrowed, I might deposit the money early so that my average balance would not have the spike.
This is an email I recently received:
"Verification of deposit program (VOD)
Today's lending market is very difficult. So we decided to help our customers with the verification paper work. The paperwork that will let you get approved, what you deserve. As you know, credit score is not enough to get you approved.
We are a company that can help you get approved for any kind of loan, mortgage, business lines of credit etc.... We will verify your wealth. A verification that in many cases is missing or not good enough to let you get what you want, all that for a reasonable and affordable price for everybody in all 50 states!
-Verification of deposit is available in 30 to 60 day blocks
-$10k minimum up to $100 Million+
-We can close in 2-3 days
-Money will be in your name at a Top 25 domestic banks or credit unions, which ever you need
-Fees vary depending on size of funds needed and length of time required. Fee starts at 1% to 6% of total amount
-THIS IS NOT A LOAN, it's rather RENTED MONEY that cannot be touched, moved, or depleted by the client once it is in his/her account.
Call for more info 323-657-5901 and give us a scenario or question
To Unsubscribe, please click here."
Their website does offer this disclaimer: **DISCLAIMER** The Asset Broker's proof of funds service cannot be, under any circumstances, used to obtain a residential mortgage from any institutional lender in any capacity. This program can only be utilized in accordance with all laws governing the borrower's specific transaction** Interesting that the disclaimer seems to be in conflict with the email.
Read my previous post regarding paystub and income verification
The lending market in continuing to cramp developers style. I spoke with a lender today that said construction loans may be out of the question for the next 2 to 3 years. 305 deposits are being required on all loans so pretty much the cash out of a refinance mostly just stays in the banks accounts earning less interest than they are charging you to have it. Thsi is some economic disaster.
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Thanks for your comment, but what do you mean: "305 deposits are being required on all loans"?
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Sounds like fraud to me. Isn't this the same kind of wink-wink tactics that got us into this whole housing crisis?
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Actually, banks are allowed to require deposits in their institution to base the credit they extend. I believe the "305 deposits are being required on all loans" was a typo meaning 30%. I have been informed by my bank rep that their bank is requiring all commercial borrowers to have 20% of their entire lending relationship on deposit during the course of their loan. As banks have decided shore up their assets this is how they are doing so. No you tell me, who has 20% to keep in deposits these days?
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Hm, yeah... I guess, always read the fine print and, in this case, the disclaimer. In the world of money loans, does this sound like a scam to you?
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That's why VA loans are THE BEST!
It's also interesting to note that VA loans, even at 100% LTV, still have fewer defaults than conventional loans that require a down payment. It doesn't make sense to most, but it's the truth.
Great post btw! looking forward to more!
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