Before the current financial meltdown started there were lenders as we all know making 100% or 103% or 125% loans.
I knew lenders who would loan me 100% or more with a good deal and great LTV position. Anyone with a 700 plus mid score could borrow on the No Doc or Stated Income Programs for conventional loans.
Today trying to buy a “Short Sale” or a “REO” from a bank or lender today is different, these corporations have these problem properties because of sub-prime loans primarily and the ALT - A paper that was abandoned by investors.
These banks and lenders are not stupid, they know good and well that no lender is making 100% financing available in area’s hit hard by the mortgage melt down, and if you want to buy from these banks and lenders be willing to comply with there requests for proof that you can close.
It’s as simple as that, there is no conspiracy and if “Hard Money Lenders” in that state are very rarely loaning 100% these days, they want to know the money exists to close.
Be prepared to overcome these obsticals, that’s it!
That’s the realities of the game and if the lender knows “Good and Well” your hard money lender is not bringing in 100%, then you have to supply proof of the balance to close.
These banks could really care less where the money comes from as long as it is a legal source, but because of banking laws and new FHA regulations they are required to document where the purchase money comes from!