I'm in a very frustrating situation with my lender and this noobie could really use some advice! The situation is a little convoluted, so if you keep reading... Thanks! Any and all advise is greatly appreciated!

Background:

My brother and I are partnering on our first rental property, a townhome we are buying for $70,000 with 20% down ($15,000). Per our arrangement, I was to bring $12,000 and my brother was to bring $3,000, totaling $15,000-- the 20% down payment for the loan.

I will be the only official borrower on the loan since my credit rating is nearly perfect, but my brother and I will both be on the deed for the property, 50%-50%. The seller is paying $1,400 of our closing costs and we are picking up the remaining ~$2,800, bringing the cost to close to roughly $17,800.

Problem:

I have just over $19,500 in my savings account ready for this deal, but I got an email from the Mortgage Banker today stating that of that $19,500, only about $16,500 could be verified. The $3,000 they could not verify was the $3,000 that my brother transferred to me over 2 weeks ago, leaving us about $1,800 short. I asked why the $3,000 could not be verified to which I received the reply.

I explained that the $3,000 was neither a gift nor borrowed, but a part of a business partnership between my brother and myself. She is going to check with the underwriter tomorrow and see what can be done. Until then I'm trying to get creative in order to not lose or delay this deal!

The real frustrating part is that they have had my bank statements for weeks, and this is just coming up 8 days before we are supposed to close. If they would have brought this up earlier, I would have delayed paying my $2000+ in income taxes until after close and this wouldn't even be happening.

Questions:

1. Has anyone ever partnered on a property with someone where only 1 person was the actual borrower, but both were bringing money to the table? Did you have trouble like this when consolidating funds?

2. Has anyone ever had business transaction miscategorized as "gifts" by a lender, were you able to prove it wasn't a gift or some other private loan?

3. Has anyone heard of this 30-60 "seasoning period?" Is this a Fannie/Freddie stipulation or something?

4. Relative to your lending experiences, is typical? Am I rightfully frustrated? Would you ditch this lender?

First Deal - 8 Days to Close and my Lender is Dropping the Ball

Most Popular Reply