Are there loans that do not show up on credit report

[Brian Cowan]

I am trying to purchase a property but do not have enough for the down payment yet as I just purchased another property recently. It is a smoking deal with tons of cash flow potential so I am about to lock it up in a five month lease purchase to give myself time to come up with the down payment. I am trying to use a large conventional lender because of the 30 year fixed rates they are offering, but don't think I will be able to come up with the entire down payment, closing and reserve without borrowing a small sum of money (which they prohibit). They have a two month look back period for my bank accounts, so I would need to get they money in my account two months before close. Has anyone else been in this situation? Any ideas are greatly appreciated. 

Moderators: I am not soliciting a loan, I am soliciting ADVICE on types of loans/creative financing. There is nothing in the forum rules that prohibit this post. Please stop removing this thread. 

[Bill Gulley]

Originally posted by @Brian Cowan:

Thanks @Account Closed. Good advice. 

@Richard C.  To address the mortgage fraud topic, my loan officer made it a point to stress that they only look back two months when checking funds for seasoning and that any money in the accounts before the lookback period would not be questioned. I am not sure if the unreported loan option is my favorite, but she was definitely trying to steer me in that direction. I appreciate you bringing that point into the conversation though. 

I'll see if I can make it crystal clear.

If your loan originator is suggesting that and not disclosing borrowed funds and suggesting how to beat the system then she is getting into mortgage fraud as well.  

Borrowing funds for a down payment can be done, that is not an issue but it does become mortgage fraud if you do not disclose other loans or sources of your down payment!

On a standard 1003 loan application there are several questions under the borrower's personal information. Point blank they must ask you, is any part of the down payment borrowed from other sources? If the loan officer lies they are committing mortgage fraud right along with you.  Additionally, you are asked if you have sought other financing in connection with your purchase, that doesn't say in the past 2 months, it includes forever!

There is also a liability section, outstanding debts, omission of information relied upon in a loan application is bank/mortgage fraud, this type of fraud does not require any loss of money, no loan needs to be approved, intent is automatically presumed in financial fraud it does not need to be shown as in other cases of fraud. Conventional loans or any bank loan is a federally insured arena, the penalty can be a fine of $100,000 and/or 10 years in a federal prison. 

You sign several authorizations for the lender to obtain and verify information. Those can be used as long as that loan is outstanding, if fraud is suspected, beyond that! Again, the statute of limitations for financial fraud begins upon the discovery of fraud, not when you did the deed.

Now, how do you think financial examiners catch loan officers who act fraudulently? They audit and re-verify loans. There is no 2 month look back in a loan audit, that's for origination and often, it can be 3 months, that is at the discretion of the underwriter, not the commissioned hottie red lips or sly studley trying to make loans! 

If an auditor or examiner goes through a loan file, they can look back as far as they like, bank statements, income, tax records, assets, liabilities and how you use money. 

A good examiner can know more about a borrower than their mother knows! They see your bar bill, your grocery bill, where you get gas, where you had your car fixed, how much you paid for tires, they know you eat pizza every Friday at Pizza Inn, they see how you use your money pulling out ATM amounts. They also see balances being reduced or increased, loans being paid, interest being deducted, what your income is.......I think you get the picture. 

Mortgages are audited several times over the life of a loan, right after it's made and randomly thereafter. If a loan officer is suspect, all their loans can be pulled for review, they don't even know they are reviewed!

Same with any borrower, there are several techniques to identify financial fraud. If the FBI gets notified of suspected fraud, it's no holds barred in investigating even your grandmother if that's where the trail leads an examiner. 

I've said before, prisons are full of smart people. 

I also suggest you get with an honest loan officer who isn't inclined to suggest ways to circumvent rules. Why, because they can get caught and that will lead back to you!

About 3 weeks ago, we had a local business man and his son who were caught through audits with bank fraud on a loan. Since funds were wired, the got wire fraud, since the mail was used, they got mail fraud. All in all, the father is looking at over 40 years in a federal prison, his son about 10, the father will die there at his age.

My advice, don't screw around with mortgages with federal strings attached, better too, don't screw around with any mortgage loan. You might get lucky, but you can't out smart the financial system! 

Rant of the day :)