What is The 2-Day Rule??

[Shannon K.]

Hi everyone. I went to look at a house today with my realtor and he regularly works with investors. He knows I'm planning on using a hard money loan for the funds (in combination with some of my own). I have a pre-approval letter for the amount I'd need. 

But then he told me for any REOs/foreclosures, banks will require proof of the funds in my account within 2 days. He said banks are very strict on that and they will pass me by if I cannot show the funds in my account within 2 days. He said it would be a waste of time going after any of these foreclosures/REOs if I cannot show money there within 2 days. People use HML specifically to buy foreclosed/distressed properties that are too junky to put a conventional mortgage on them! How is this possible?

No HML will fund in 2 days. That's not even enough time for the lender to look at the property, run comps, and make a decision! Everyone I've ever seen use a HML has been able to obtain financing within 20-30 days or so for their loan to come through. How come I only have 2 days to show funds in my account? Could anyone shed some light on this as I'm wondering if I'm somehow misunderstanding him... Thank you all.