I have a deal that I want to close with the bank. It is a REO property. The bank is asking for proof of Fund before closing. They do not take the hm letter stating that they have the fund available.
How do I do this?
Help…
Hi,
Why doesn’t the bank take HM as proof of funds. That is the proof of the funds. I worked as an asset manager for 16 years selling REO through out the US and the person your talking to must not understand that they can call the HM and confirm that this is your proof of funds.
Are they asking about your down payment money? Are they asking to verify your reserves that the HM is requiring? Please clarify. Christine
Hi Christine,
even though I have the Loan Pre-Approval for the HM lender, Wells fargo is still asking that I provide them my bank statement or bank verification that I have the funds available.
if you have any other ideas, that would be great.
YES, Wells Fargo is looking to verify you have your 10% to 20% down payment, the skin in the game.
WF knows the hard money guy will only put up XX% of your purchase price!
This is pretty standard, so show WF your bank statement for one account with enough cash to cover the deal or ask your bank manager for a “Bank Letter of Credit” showing ability to pay your down payment!
You will have to ask WF if they will except a BLOC in lieu of your bank statement.
But this is all very normal to the deal.
Why the hell should it matter to Wells Fargo, if there is any skin in the game. After they sell the property its out of their hands. They are no longer tied to it. If a HML is going to fund 100%-200%-10000% , it really is none of their business. If they are financing part of it, then sure, they should be able to expect a down payment. Otherwise, I’d just go look for another deal with another bank.
Why doesn’t WF just call the HML and verify the funds. Isn’t that kind of the point of the POF?
Our Realtor told us some of the banks holding REOs are making people fill out loan apps with them even if they plan on financing thru another lender. I believe WF was one of these so maybe that’s why they seem to be acting funny with this deal.
I suppose it is potentually possible that old Wells Fargo called the nice “Hard Money Lender” and Mr. Hard Money Lender said “Yes we are loaning Mr. & Mrs. Real Estate Investor 80% of the purchase price”
God, I feel like a bad guy even saying that! Bite your tongue quick GR.
Then Mr. Wells Fargo said "We just want to make sure you can close if we take this property off the market and except your offer!
Mr. Wells Fargo asks “Can you please supply proof of the balance of purchase funds?”
Now “I said it” I am a bad boy!!!
Now I feel like an A$$. Yeah, I didn’t think that far into it.
thank you for all the comments.
Actually, the HM is willing to loan the whole thing. I even send over to Wells Fargo the Pre-Approval letter with the “ratified Contract” waiting in order to complete the final states of the loan process.
The HM lender is loaning me 10k beyond what Wells Fargo is asking. It is in the Pre-Approval letter.
WF does not care. They are looking to see real fund only ahead. They do not care of making calls to the lender.
Since the property is in WF hands, that is their process. I am being told by their agent.
Just to give everyone a head up in dealing with wells fargo.
Hi Alice,
Sounds like you are working with a non thinker in the REO dept. Ask the agent how long the property has been on the market. If it over 90 days ,than ask if the seller would consider giving you 48 hour first right of refusal while you get your financing finalized since you are unable to meet their requirement of proof of funds in a deal where you already provided proof of funds.
It would be worded something like this:
Seller to continue to market property for sale. Buyers requests 48 1st right of refusal within first 15 days of acceptance of offer or until loan is funded. Seller is aware that buyer has provided full proof of funds from ABC lending to purchase this property.
My feeling in this is that the agent has other offers or knows they will get other offers shortly at a better price and is representing the seller. Is this a dual agency transcation? Something is not correct here. You said that the HM was giving 10k over the purchase price. That is rare these days. Most want skin in the deal. WF most likely knows this. Move on to the next one of this doesn’t work. Next…
Some banks, and appearantly wells fargo is included are not insisting on pre-approving the buyers even if you are going through somone else. It appears this is the case for you.
Very silly I know, but here we are! Seems a lot of people are making frivilious offers these days and some banks are wanting to make sure the buyer is strong before accepting any offer.
Yeah, it is interesting I guess each bank is different. They are trying to sell these properties many of which don’t qualify for traditional financing or they don’t want to sell them to someone with traditional financing because it takes more time…so basically they want all cash deals which is more what a hard money loan is…but they don’t want to accept that people want to use hard money lenders sometimes.
With the realtor I am working with she said that my hm proof of funds letter would be “an all cash deal” . I could see though how the banks might wonder if someone has the rest of the money to put up, if the HML is going to put up 65% for example. They should be willing to accept a HML letter and proof of funds from a bank account for the rest of the amount.
But in your case you are stating the HML is willing to lend OVER the purchase price…so it seems pretty stupid that Wells would give you trouble .