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Permalink Reply by joe beauchamp on September 21, 2010 at 2:59am

Banks seem to be fickle about this - the 1st will not allow you to put that $2K on the seller's side. Banks always seem to have the attitude that if there is any money at all, they should get this. Although it's hardly legal to tell someone that they do not have the right to pay one of their bills (the 2nd), this is what the 1st will do.

You will either need to discuss with the negotiator how to put this on the HUD-1 or you will need to submit multiple HUD-1's as they reject the different ways. You can put it on the buyer's side but then the buyer's lending company usually objects.

They do not want to see and $$ going somewhere other than their pockets. They might accept it as an out of closing transaction (POC), meaning it is noted on the hud but no $, however, the 2nd is likely to object because they want to see the $ on the HUD-1. On my last one, it was POC and they still objected to where it went - which line section.

So, as trivial as it sounds, as stupid as it is, you might run into "it cannot be done" to taking a week for whoever you are dealing with to get it in a form acceptable to his people, to going back and forth between banks after each objections to being lucky and running into a negotiator who is helpful and knows what his bank needs and it happens to be what the other bank will accept.

I thought it should be cash contribution from the seller and then bump up the amount to the 2nd - nope.. Probably because, regardless of the contribution, it would violate the investor guidelines of how much to give the 2nd.

Yes, your cute little innocent question does open a can of worms. You should start now with floating that HUD-1 around to get layout approval from both banks.