Car DP being questioned by UW

[Anonymous]

Hello all,
I am a huge lurker in this forum and I’ve learned so much from reading and searching through these threads. I have 2 issues that I haven’t seen before.
My file is in UW and they’ve come back with some conditions that were, for the most part, pretty easy. However 2 things happened. I sold some luxury goods (purses) on an online site called Fashionphile. It’s all legit. The payments were direct deposited into my account so there is a paper trail. I also was able to print out the list of goods and send it to them.
Apparently they are looking for “estimates of value” for the items sold. They are expensive purses and there no official ‘estimate value’ for them. I went and screen shot all the purses and then went to the site of the brand and screen shot their prices and sent that. The LP sent it up and we are waiting to see if that will work. If not, they will disqualify that amount - which is $11k from my available funds for closing.

Also back in March before I thought about applying for a mortgage - I traded in my car. When I did, my BF our $4k down on the car for me - cash because he owns his own business and took it from that account.
The UW wants to see where the $4k came from. I don’t understand why that’s a big deal since it was a month before my application went in and had nothing to do with my cash for this mortgage process.
Obviously I don’t have a paper trail for that. So the LP also sent a note to find out what happens with that.

Sorry to be so long, but just wondering if anyone has had any experience, thoughts, anything on this. I was supposed to close on Tuesday, 5/15 but didn’t get my CD yesterday so I’m sure I won’t be closing then.

[OmarR]

I am not an expert in this field, but being a homeowner (several times) I know that they are basically looking for:

Where & how did these "large sums" of money come into your life recently. Are you trying to make yourself look better on paper so you can better qualify for a house?

When it comes to the purses, they basically want to make sure that the $11K actually came from the sale of those assets that you actually did own & possess. As opposed to a family member lending you $11K and them telling you to just "makeup a story that you sold expensive purses". $11K is a LARGE amount of money, so I don't blame UW for going after that.

The same principle applies for the $4k your BF lent you. Is this a loan? Is it a loan with a high interest rate? Is it due soon? If it is, can you pay it back AND pay your mortgage? I am assuming that they found out about this loan because they asked for your previous 3 months banking statement (or something similiar) and there was a paper trail on the $4k?

Again, I am not an expert, and there are more knowledgeable people on this forum. But I have learned that if there is even a "shred of an idea" that you will be buying a home in the near, near future, be prepared to answer the common question of "where did this recent sum of money come from?" And if you make those type of financial moves, try and wait 3-6 months for them to fall off in your distant past *IF* you can't explain them to a strict UW.

[Anonymous]

Thanks OmarR.
I totally understand that it would seem odd to the UW that I sold that much in luxury goods - I’m just not sure how to source it. The company direct deposited the cash into my account. I have the paperwork from the company showing the items and what they paid me for them. Although it actually just occurred to me that I still have the original receipts from the items so maybe that will help to establish the value.
As for the car down payment - they discovered I put $4k down from the paperwork that showed the trade in of the car since it hadn’t been reported to my credit report yet. My BF owns a restaurant so I’m sure he just took cash and got a cashiers check. I gave them the receipt for that but they want to see where it came out of his account. Since that didn’t happen, I really don’t know how to prove that.
Since the $4k wasn’t a part of any of this process - how would they proceed? Would they just take $4k off my funds available for my down payment and closing? Even if they do I have enough so that’s not a problem.
My LO emailed me today to tell me that the bank is really working hard and they are hoping to have the CD’s to be on Monday.
We’ll see.

[me12345]

Like anything that you sell for closing funds they will require you to establish the value of the item, ownership of the item, and the sale or transfer of ownership of the item, we mostly see this with cars, but it can be anything of value.

In your case with the purses, you are fine with the documentation that you have, you are able to document all of the requirements items listed above.

However, with the cash down payment from the BF, that is a loan OR a gift, and it must be documented as such, if it cannot, then they will "Back it out" of your closing funds, if you still have enough funds to close then all is good...If not, and you you are short on funds to close then that could delay the closing and you may need a "Plan B"

Thanks,

[ShanetheMortgageMan]

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@Anonymous wrote:
Thanks OmarR.
I totally understand that it would seem odd to the UW that I sold that much in luxury goods - I’m just not sure how to source it. The company direct deposited the cash into my account. I have the paperwork from the company showing the items and what they paid me for them. Although it actually just occurred to me that I still have the original receipts from the items so maybe that will help to establish the value.

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The original receipt will prove ownership and if you didn't sell it for more than what you purchased it for, should also document the value.

Worst case with the $4k is they'll back it out of your funds.  If you want to get it over with, sign/date a letter of explanation by you & your boyfriend stating where the funds came from (cash from his restaurant, or wherever) and send it to your LO over the weekend, after the underwriter reviews that should be the end of questioning it - they'll have the letter of explanation + documentation, so there isn't anything more that could be produced other than videotape evidence.  You have a TV crew following you 24/7, right?  The underwriter will either count it or not count it, but either way you said you have enough funds (just make sure your loan approval doesn't require any reserves).

[Anonymous]

Thanks so much everyone.  I am praying for my CD's today.  I was supposed to close tomorow, but my realtor just pushed it back to Thursday.