The Dodd-Frank bill has everyone running scared. Lenders are supposed to "source" any funds that come from a person buying a home. This includes your down payment and any funds for closing.
A large bank making a mortgage loan just required a buyer to provide documentation showing that the buyer actually took their down payment from their 401K.
The buyer actually had to provide documentation of the following for their down payment funds:
The original amount in the 401K account.
The Wire Transfer documentation from the company holding the 401K account to the Bank.
The Wire Transfer receipt from the Bank.
A new statement from the 401K account showing that the amount had been removed from the account.
A statement from the Bank showing the balance of the account prior to receiving the funds from the transfer.
A statement from the Bank showing the balance of the account after receiving the funds from the transfer.
The wire transfer documentation from the Bank to the Title company.
To top it all off, the lender was the same bank in the transaction - Holy Cow!
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