FNMA Request for Seller Financials

Chuck Wartman August 30, 2011 at 8:23am

One way around it if the person continues to be a pain. Have them send it in directly to the bank. Maybe that will help them feel better about it not going through so many hands.

Mark August 29, 2011 at 8:57am

They wouldn't have a foreclosure on their credit report if they weren't on the mortgage - which is the subject of the thread.

Being added to the deed doesn't obligate you to pay the mortgage, nor does it allow a lender to smear your credit.

Brian Avery said:

I have had several clients refuse to supply their financials. They all have one thing in common. A Forclosure on their credit report once the trustee sale took place.

TG August 29, 2011 at 7:04am

The bank and the IRS are not the same... both partners are responsible to the government to pay taxes on any income that resulted in the transaction, but only the mortgagor is responsible to the bank on anything that has to do with that loan. Sorry, but only the person on the loan SHOULD have to produce financials. The bank CAN ask for whatever they want thoug...they can ask the seller's best friend to produce financials if they want to and deny the short sale if it doesn't happen. So yeah, they can do this..it's just ridiculous, that's all.

Dean E Eshelman, CPA, CDPE, IRES August 29, 2011 at 3:54am

I can tell you as a CPA, that when both went on the deed they created a partnership in the eyes of the IRS, even if there is no partnership agreement. How was the investment property reported on tax returns - ie mortgage interest deduction. Was it split between the two. If rented or had rental or investment expenses, how were they reported on tax returns - ie were they split between the two. If so this is further indication of the existence of a partnership. Sorry, but both sellers have to produce financials.

TG August 28, 2011 at 8:47am

Agree with Kevin here... The bank CAN ask for whatever they want, and it's true that they have the power to accept or deny the short sale, but there is so reason they should be taking anyone's financials into account other than the person on the loan. Think about other similar situations... if this person were to default on their loan the bank can't go after someone else just because they're on the deed. If I apply for a loan, if I'm the only person applying and putting my credit rating on the line, I can't say "oh yeah but this person I'm living with makes $100k also. they aren't on the loan, but just take that money into account and let me more please". The bank shouldn't be looking at this any differently...

Victoria Frieberg August 28, 2011 at 2:28am

My experience is similar to Wendys. I have never had a short sale lender request more financials then provided at the onset of the package, financial statement, bank accounts and taxes should pretty well cover what is coming in and out of a household if you have married partnters. The hardship letters my clients write will usually also reference their spouse, such as 'my husband and I" or 'my wife and I" .. it is not as if they are trying to hide the fact that they are married. Now, you also have the added 'HUD interview' phone process. I have never had a short sale declined for anything to do with the seller..only buyers offer.

Jason Opland August 28, 2011 at 2:15am

If you have a husband and wife who have separated and are now maintaining separate households they should complete two separate financial worksheets and provide their separate bank statements and tax returns if they have them. They should not complete the same financial worksheet with the second party completing the co-borrower section unless both parties are still residing in the home and splitting the bills. But in response to providing financials for a party who is not on the mortgage, I see little reason not to provide such as this party cannot be held responsible for the mortgage and as Cameron has suggested the investor is simply seeking to confirm the household is in fact experiencing a hardship. The banks and investors are offering homeowners who are experiencing a verifiable hardship an alternative to foreclosure and the request for the spouse's/partner's financial is simply a means to preventing fraud and strategic defaults. We as agents obviously want to protect our clients and their best interest but it is also are job to protect the banks and our industry from fraud.

Kevin - Greenville, SC August 27, 2011 at 3:20pm

Personally I would strongly object to producing anyone's financials for a Short Sale who is not obligated to re-pay the loan, period.

Wendy Rulnick August 27, 2011 at 11:39am

I am working a loan now, and have done several, where only one name is on the mortgage with married couples, yet both names are on the deed. Also, had this with children on the deed, not the mortgage. I've never received a request for a party's financials who is on the deed only. I don't understand why the investor wants that. If there were a foreclosure, would the mortgage holder go after the deed holder or the mortgagor? The mortgagor, correct? Attorney comments welcome.

Victoria Frieberg August 27, 2011 at 10:33am

Not trying to change anyones mind...if the financial statement reads 'co borrower' and the other person is not on the loan, they are not a co borrower. if the financial statement reads spouse..they are a spouse and spousal income is included. if the financial statement says total household income..they get that. all in the wording. they also will generally ask for taxes, where both spouses, if filing jointly are included...the information is not withheld. Financial statements are worded differently, my attorney has always said, never offer more than is asked for.

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FNMA Request for Seller Financials

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