Hear Ye Hear Ye All Loan Applicants! The lending industry continues to tighten the underwriting rules on every facet of the mortgage process. In the past few weeks, lenders have had several investors make it a requirement to verify the source of an applicants' earnest money deposits. Previously, the industry standard was to only verify deposits that were greater than 2% of the sales price, or that were part of a gift from a family member---and that verification process was pretty loose.
As you might imagine, now that lenders are looking at these deposits more carefully, they are finding all sorts of situations from credit card advances, money from friends and employers, or money they can't track at all. BIG PROBLEMO for you the Buyer!!!
Sooooo...all you loan applicants out there....your latest loan process hoop to jump through will be to generate a paper trail for your earnest money just as you would for a gift or the sale of an asset. Are we having fun yet???
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