All Forum Posts by: Nick Baker

My lender is with Wells Fargo which is where my current mortgage is - my neighbor's home is basically and exact replica of mine. I understand what you are saying that Fannie/Freddie are rejecting these. I wonder why he (my lender) thinks simply explaining that I honestly will move in will rectify the situation. You have given me some good feedback and information. i appreciate it and will call the lender tomorrow to find out why he thinks this will be able to be underwritten with it being next door.

Also, I have the cash - I can easily show the funds necessary for the down payment. I just want the cash from him since he is offering it and I won't have to use my own.

I can also cash flow both properties without rent - qualifying is not an issue. Just wondering if there is a way to get the additional liquidity without breaking the law.

I figured you would ask these questions. Yes, you are right that an investment property would require 25% down. I am actually going to move into this house and turn my current home into the investment property. The lender is fully aware of this and has said that as long as we assure the underwriter that I will move into this residence as my primary residence it shouldn't be a problem. And yes, I know the kickback outside of closing costs and prepaids on the HUD 1 is a violation of RESPA - that's the whole point of the question. Can you think of another way to structure the deal so that I can still gain the liquidity without it being a violation?

Ok - so this is a little tricky but ill try to be as brief as possible. Bottom line - my neighbor is about to sell his house and was going to use a realtor. Since rates are low and he told me this I decided to make him an offer. I offered to pay him his proposed list price (it will appraise - i'm certain) if he will give me the 6% back that he would have had to pay the realtors. I have the cash to do this on my own I assure you - but that is not an option as I have promised the wife to use it for other purposes. With that said, I've run into a snag. I wanted to use the 6% incentive to pay all of the closing costs and prepaids (about $5400) and use the remaining $3-4K towards the 5% down required which would leave me only about 2-3K out of pocket. The bank has said they won't allow him to give me cash above the amount of the prepaids and closing costs and that he should just lower the price if I want anything beyond the closing costs, etc. That doesn't help me though because I want the cash for the downpayment rather than using my own. My immediate thought was just have him pay me in cash at closing and not have it on the HUD 1. However, as I look into this it is clearly illegal (mortgage fraud). I'm not looking to do anything unethical or illegal. Do any of you have any ideas on how I can still get all 6% out of him so I can use as little cash as possible?