Be a Turkey and Make Sure Your Mortgage is Denied

1.    Depositing undocumented funds into your bank accounts:  Cash on hand; mattress money; cash in a safe; repayment cash (or checks) you loaned family or friends suddenly showing up on banks statement while you in are in process of purchasing a home will be a gigantic headache for you and your lender.  Yes, we know it is your money but lenders will not accept cash for a down payment or closing costs.  Money laundering is a big deal in the fraudulent mortgage world; therefore following lenders guidelines for deposits is required.

2.    Sloppy payment of bills, delinquent on active accounts, collections, repossessions, or charged off credit:  If it is not your fault, fix it.  If it is your fault, fix it.  Even if it is not your fault, it will take elbow grease on your part to correct your credit report.  Depending on the type of loan, sad stories probably will not make a difference.

3.    Omitting information on the loan application regarding residence and/or employment history, other owned properties or significant economic events such as a foreclosure: The loan officer’s job is not to shuffle paper but document or investigate the information on the loan application.  Your lender will find out anyway, so be upfront with your financial history.

4.    Filing one set of tax returns to the IRS and providing another set to your lender in order to qualify:  The lender will pull a 4506T from the IRS to compare.   Busted! The lender is then required to turn your name over to the Suspicious Activity Report, and soon the Financial Crimes Enforcement Network will be paying you a visit.  Your new home may be a cozy cubicle with not so decorative bars.

5.    Changing jobs while you are in process of purchasing a home: This is never a good idea and it may delay your closing.   Also, if your nifty new job is all commission and you qualified with a salary, you may need to extend your current apartment lease by a year or two.

6.    Contact your loan officer BEFORE making any major purchases.   If you choose to buy that red Lamborghini  before you close on your home, you may find yourself making living arrangements  on  top of the V-12.

7.    Refusing to provide or providing partial documentation.  There is little room for negotiation.   You’re not on a game show or buying a used car.  If you can’t find the required paperwork, notify your loan officer and see if there are other options.

Buying a home is a privilege not a right.  Remember, mortgage guidelines are not set forth by the loan officer…Or everyone would get a loan.

Diane Gerdes