FHA gift letters and verifications

wendlan · ‎06-08-2015

I am at the end of my rope here, we have been working on this loan sice February. I explained everything upfront about where our $8000 came from. $2000 from my husband's 401k. The $6000 is trickier to understand but fully explained to the LO. My ex-husband (married 20 yrs) and I have been divorced 5 years. He sadly died of cancer Dec 2014. My lawyer screwed me and never filed a QADRO form for my portion of his pension which is in our divorcee decree. His pension gets paid entirely to his current wife of 4 years. She wrote me a check in Feb 2015 which I deposited into my acct for some of the money, very nice of her to do that. We have a rocky relationship,her affair with my husband ect...This was fully explained to my LO .He told me no problem just turn in front and back copy of cancelled check. Fastforward,2 wks ago loan processor wants letter where the money came from,same info written in the letter was given. Last week I get message they want a gift letter signed from her, this is a stretch and haven't talked to her since Feb. Fine, I get the letter signed causing me a great deal of problems. NOW THEY WANT HER BANK STATEMENT, I tell them that isn't going to happen and explain my situation again,they say they will get an exception. NOW TODAY-1 WEEK FROM CLOSING. That is not good enough-they want my dead ex-husbands widows bank statement showing the $6000 coming out. Ridiculous,or they tell me I need a new $6000. **bleep**..really,they have the cancelled check and they see it in my bank account since Feb. Isn't it SEASONED enough!!! OR they tell me I can start over with a new loan since my money is now properly seasoned.

Do they expect this from everyone? The gift was not to buy a house and how can they possibly expect her to give that. What do I do?

wendlan · ‎06-08-2015

Also they told me I can use other funds, like I have any. Can my parents gift me $6000 now to use? Wouldn't that money have to be seasoned too? We are in the last week of our 60 day contract the way it is.

StartingOver10 · ‎06-08-2015

@wendlan wrote:
Also they told me I can use other funds, like I have any. Can my parents gift me $6000 now to use? Wouldn't that money have to be seasoned too? We are in the last week of our 60 day contract the way it is.

If your parents gifted you $6k it would not have to be seasoned. They would have to show their bank statement though as apparently that is what your lender wants to see with gift funds.

It sounds like the u/w is treating your $6k as a normal gift rather than as proceeds from your former husband. I am so sorry for your loss and all this stress. Can't your LO jump in and sort this out with the u/w? It really does sound like a miscommunication here.

wendlan · ‎06-08-2015

I have both a loan officer and loan processor,the LO seems to have more experience. The loan processor sounds like a young girl on the phone, she asked to UW to make an exception and not require the bank statement but they denied it. I got upset with her and asked her why I only heard about this last week when this has been in the process since Feb and the loan officer never mentioned anything about this, I have a call into him too. She told me it's FHA guidelines. I have a call into my ex-husband's wife to see about the statement, I don't know what she will say. She just has to send it to them but she may not know how to do that on the computer. This experience is a total nightmare.All kinds of appraisal issues too. People ask, what could go wrong,well lots and lots and lots!!!!

Anonymous · ‎06-09-2015

@wendlan wrote:
I am at the end of my rope here, we have been working on this loan sice February. I explained everything upfront about where our $8000 came from. $2000 from my husband's 401k. The $6000 is trickier to understand but fully explained to the LO. My ex-husband (married 20 yrs) and I have been divorced 5 years. He sadly died of cancer Dec 2014. My lawyer screwed me and never filed a QADRO form for my portion of his pension which is in our divorcee decree. His pension gets paid entirely to his current wife of 4 years. She wrote me a check in Feb 2015 which I deposited into my acct for some of the money, very nice of her to do that. We have a rocky relationship,her affair with my husband ect...This was fully explained to my LO .He told me no problem just turn in front and back copy of cancelled check. Fastforward,2 wks ago loan processor wants letter where the money came from,same info written in the letter was given. Last week I get message they want a gift letter signed from her, this is a stretch and haven't talked to her since Feb. Fine, I get the letter signed causing me a great deal of problems. NOW THEY WANT HER BANK STATEMENT, I tell them that isn't going to happen and explain my situation again,they say they will get an exception. NOW TODAY-1 WEEK FROM CLOSING. That is not good enough-they want my dead ex-husbands widows bank statement showing the $6000 coming out. Ridiculous,or they tell me I need a new $6000. **bleep**..really,they have the cancelled check and they see it in my bank account since Feb. Isn't it SEASONED enough!!! OR they tell me I can start over with a new loan since my money is now properly seasoned.

Do they expect this from everyone? The gift was not to buy a house and how can they possibly expect her to give that. What do I do?

Wow, what an awful situation. I'm so sorry; this must be incredibly stressful for you.

But unfortunately, as you are finding out, the lender must "follow the money". First they have to establish that the money is indeed a gift from her to you and does not have to be repaid. They then follow the money to verify that it actually did come from her bank account. Some lenders will not even accept gift money unless it came from a relative - which she is not, so consider yourself lucky there.

I'm sorry. I know this is creating a lot of stress at the last minute; your lender should have told you this months ago.

I wish you the best and I hope this all works out.

Marlena

Anonymous · ‎06-09-2015

For my "gift funds" from my father-in-law, the underwriters would also accept a signed letter from his bank stating he had the funds in his account when he gifted them to us. The point of needing her statement is to show that she had the funds available, because as my LO explained it, the giver of your gift funds could be theoretically borrowing them from someone else, which is a roundabout way for you to be borrowing them instead of being given them outright as a no-strings gift. I say all this to ask: would it be worth it to find out if the UWs would accept that instead, and then your ex-husband's widow would "only" have to ask her bank to provide that letter, which bypasses the uncomfortable aspect of her having to disclose the state of her bank account to anyone and also any potential for tech problems on her part.

ezdriver · ‎06-09-2015

@Anonymous wrote:
For my "gift funds" from my father-in-law, the underwriters would also accept a signed letter from his bank stating he had the funds in his account when he gifted them to us. The point of needing her statement is to show that she had the funds available, because as my LO explained it, the giver of your gift funds could be theoretically borrowing them from someone else, which is a roundabout way for you to be borrowing them instead of being given them outright as a no-strings gift. I say all this to ask: would it be worth it to find out if the UWs would accept that instead, and then your ex-husband's widow would "only" have to ask her bank to provide that letter, which bypasses the uncomfortable aspect of her having to disclose the state of her bank account to anyone and also any potential for tech problems on her part.

As a former mortgage broker/owner, my recommendation is for you to follw the path of having the necessary funds gifted to you by your family and be done with it. It must be horrible for you to be going back to someone who may have caused your divorce ... but your priority should be to find the least stressful path to a solution. What the underwriter is requesting is normal ... but your LO should have been on top of that a long time ago. Too late to worry about that now that you are soooo close to closing.

I wish you the very best outcome and please do take care of yourself. This too shall pass!

frugalQ · ‎06-09-2015

This is definitely a lender overlay. My lender only needed the gift fund letter which stated the name and account from which the funds come from. And proof that the funds actually came from the account on the letter. Since it was wire, it was a copy of the actual wire. Since you have the cancelled check, that would satisfy.

My lender never asked for proof that the funds were in the gifter's account.

this was a conventional loan

wendlan · ‎06-09-2015

In the end I asked if she would email or fax the statement in,she agreed but I have to wait for her to be able to do so. She is going to contact her bank on Wed, I hope she will follow through with it. I have no choice but to wait and see. We will not be making our Mon closing. Our appraisal recheck is taking awhile also and who knows what else they may decide is wrong. This whole thing sucks!!!