Buyer demands financial proofs...

[IOBA]

Heard/read a new one - that the seller is requiring (in the new contract) that the buy submit a letter from the underwriter (within 21 days of ratified contract) stating the financing is guaranteed!

The letter must state the buyer has

- submitted ALL financial documents (must list out W-2's, tax returns, pay stubs, bank statements, insurance declaration page, etc submitted) to underwriting

- said copies of docs must be attached to letter

- proof of savings (demanded bank statements copied to them)

- the EXACT terms of financing the buyer is approved for (ie - interest rate, length of mortgage, points involved, how much cash to close, etc)

- appraisal is completed

- buyer is DEFINITELY approved for funding no matter what

Closing is 45 days after ratified contract, yet they demand all of this personal information from the underwriter within 3 weeks???

A preapproval letter was submitted with the offer.  The preapproval letter included the purchase price, interest rate, term of loan, and loan amount.  Also had to submit proof of down payment with the offer.

So what is up with all of this other stuff the buyer is demanding?   And why do they need copies of all these personal documents (w-2's, tax returns, etc -- all the stuff the underwriter has to verified was turned in)??

Has anyone else dealt with this?  

Don't underwriters look at the file and give final approval closer to the closing date, instead of closer to the ratified contract?

We rewrote that clause, but the realtor says it's not going to fly.   Says the seller will come back with those terms again.   For them, it's a deal breaker.  

I don't get it.  It's like I am back in the 80's trying to buy a house and I have to prove to the seller I am worthy and financially sound.  (I think I might be personally worried about identity theft if this personal has all of these docs in hand!)

[Anonymous]

I would be worried about ID Theft also. I would qeastion the selllers motive. Not that I have any knowledge in this area. But I am currious if the "seller", is an indivdual or bank owned?

~Steven

[mamahearts]

There's no way I'd give the sellers all of that personal info.  That is what the underwriter is for.  The seller is not financing you, the bank is.  I don't see how the seller has any right to that information and I think they want you to walk away.  Unreasonable requests, like this, to me are dealbreakers.  You have enough hoops and hurdles to go through by the people who make the decision on your mortgage.  I can not imagine any motive for the sellers that would make this a legitimate request.  Maybe some of the loan officers can weigh in. 

[203bravo]

I had to do something similar when I bought my house - I had to submit a pre approval letter with my offer as well as part of the offer package asked for personal financial information.... The reason: I was dealing with a relocation company and part of their process was to verify that the offer had a high probability of actually going through. 

The relocation company did a financial review prior to submitting the offer to the home owner.

But I agree, I wouldn't give personal documents to a home owner directly.

[IOBA]

I agree the -- MY lender -- needs all of this.    NOT the seller.

But seriously, if I have provided a lender pre-approval and proof of deposit with the offer, I think it is unreasonable to make further demands regarding personal financing.   I really wouldn't waste my time with a purchase offer if I hadn't already done my homework and felt confident I could get financed.  I know not everyone works that way.

Now if they asked for a letter when the uw has made the final approval, ok, I am good with that.  And honestly, when that happens - the uw says it's a go - THEN we rush to closing!   I am not going to sit on that and wait a few more weeks.  

There's no guarantee, until we actually close, that the deal is going to go through.   I am the one with the most skin in the game (10k ernest money, 1k in out of pocket, up front costs for inspections and appraisals).    There's no guarantee that the seller won't cancel at the last hour.

My realtor tried to tell me that is normal all the time for the seller to request!   Nope.  Not since the 80's....

[Anonymous]

Yeah. I hear you.

We bought a house in Feb from investors (they were a family of realtors). It was a foreclosure. When we went to make the offer, they told us a condition of doing so was to go thru a preapproval w their loan officer from their real estate co, even though we would be using another mortgage broker for the purchase. They said they wouldn't accept offers from anyone who didn't do so.

Um, no.

Luckily, our LO knew theirs, and she chatted with him and got it waived with the sellers. We were preapproved, she said, and she guaranteed we'd close the loan.  We just had to provide the final written approval within 10 days. (We only had a 30 day closing date, so.)

I was mad, though, and wanted to walk. My husband refused to let me. I guess, good news is we got through it. 

Good luck with your situation!

[IOBA]

Thanks!

It irks me so....my lender says they will produce the required document/letter saying final approval within the required timeline regardless of whether the loan has final approval or not.  (Shocking!  The lender can't return phone calls to answer questions about the GFE, but he can respond to that one email??)

I received the distinct impression from his email that they will NOT provide copies of the personal information (w-2's, paystubs, etc).   Good.

As for the seller, I can understand that they want "for sures" and "guarantees".   Well, heck, me too!   The best I can do is provide a pre-approval letter and proof of down payment/proof of funds needed to close per the pre-approval letter loan terms.  

It worked out for you.  That's great.    I have refused to look at any properties that BA owned or that require a certain lender for the mortgage.  Uh, no thank you, no way, not happening.   

My realtor just informed me that she had to make changes to the contract.   One change was that it was mandatory that we use the seller's title company.  I don't remember seeing/reading anything about that in their terms.  I could have missed it, but I don't think so.  I think the offer was returned for this "correction".  ****   Any problems/red flags with that requirement??

And two, again per the seller, a ratified contract is a MUST within 7 days of the initial offer.   You mean, I only have to wait a week??    I can live with that!   (The Freddie Mac drama has dragged out two full weeks and still going...will update the other post about that one!)

So, in about a week, well, within a week, I should know something.  Which could be nothing the way things have been going.