I wanted to post a topic about this as some particular deals and particular loan officers have come across my desk. One of the borrowers asked me about a situation where he had problems proving his rental payments. He had been paying cash (as many do) for his rent and was told by the loan officer that a VOR (Verification Of Rent) was needed and it nedded to be done by a professional management company to get the program the loan officer wanted to get him in. The loan officer suggested that the borrower have his sister act as a management company as fake documents to show 24 mionths of rent history. All the sister would have to do is make up documents and then when the mortgage company called she would act as the manager and verify the rent verbaly on the phone. The sad part of all this is the fact that this happens every day. You have loan officers that are concerned with approving you at any cost to fill their wallets and they frequently step over the line and ask you to stretch the truth, forge documents, and commit mortgage fraud. For the most part, if all of this lying needs to be done in order for you to get a loan...then there is a good chance that you weren't meant to get a loan in the first place. You have to ask yourself if the loan officer is trying to do the best for you...or for him...if you are asked to do this. I have several people contact me every week that are in foreclosure or have gotten themselves into a situation like this and they are scared of what to do. My suggestion to you is to ALWAYS tell the truth , even if it means that you dont get your loan today...and have to wait a few months until your situation is right. You want the loan officer to be honest with you so I suggest doing things honest yourself and if approached by someone with a suggestion to do otherwise I suggest you find another broker AND file a complaint with your sate's financing authority. And for those of you curious, yes...I will be following up with this professional and possibly filing a complaint with the loan officers employer and state agency. To do nothing would be the same as doing it myself. I would be curious if there were any other stories such as this one with the poseters on the boards.
Have a story as well. We re-fied the house in January. Just before the final signing, they apparently ran all three credit reports. Experian and TransUnion were 800+. But Equifax was low 700s, due to 2 bogus collections that had been associated to me. I had no knowledge of them until that point in time. The loan officer wanted me to just sign a statement saying they were mine and that I would deal with them. Yeah Right! No freaking way am I going to admit to two collections (one paid, one not) that weren't mine. Instead, I offered to provide a statement that they weren't mine. But they made my doing that a big pain in the rear. I should have just found somebody else. What a bunch of marooooons.
How about just the "I will deal with these" part? That would be true. Or are we Monday morning quarterbacking?
http://www.creditnet.com/ Don't click it stupid, yer already here. ========================== Who wants to start a don't click it thread.
I beg to differ with you, although only in part. That is the part where you say, "If all this lying needs to be done in order for you to get a loan...then there is a good chance that you weren't meant to get a loan in the first place." While lying and falsifying documents is, in and of itself, unethical, it isn't always done to fabricate an entirely untrue scenario. Sometimes, as in the situation you've described here, it's done as a way to provide evidence of something that is actually true, but can't be verified through the normal means. This is not a situation where the person wasn't "meant to get a loan in the first place". Based on the *truth*, this person *did* qualify for a loan, since he actually had been paying his rent. The difficulty was encountered in finding a way to verify this truth for the mortgage company. In the end, the loan officer's solution was to have a true fact verified, but by a falsely created entity. Please don't misunderstand: I am *not* saying you're wrong to come down on this loan officer. I'm only disputing your assertion that this is an example of someone who didn't really qualify for their loan. Your scenario here is similar to one I found myself involved in years ago. My aunt purchased a condo for me to live in back in 1994 (we still live in it today). At the time, she had to say that the condo was going to be owner-occupied. Otherwise, she couldn't get the mortgage because there were too many other rentals in the condo complex. She had to state that she was going to rent out her current house and live in the condo. In truth, she was going to continue living in her house and I was moving into the condo. After the condo was purchased, my aunt gave me power of attorney over all matters regarding it so that I could deal properly with the homeowner's associaton and other such issues. I moved in and have lived here for ten years, making the payments and taking care of all maintenance, and treating it as my own (which, between her and I, it is). She hasn't even visited the place in over seven years. There's been no need. As far as we are concerned, and as far as the "way" it is lived in, it is owner-occupied. So, did she/we provide false information? Well, yeah, I guess we did. But, was it done in order to undermine what the mortgage company was *really* oncerned about (that the condo wouldn't be a rental)? No. It was done because there are sometimes situations that the black-and-white, cut-and-dried, inflexible corporate world of financing simply isn't set up to be able to deal with. Family situations like mine fall into this category sometimes, and so do the lives of people who frequently pay bills in cash. In our situation, I would not have blamed anyone who took issue with what was done. On a technical level, it wasn't totally kosher. But it wasn't done to get a loan for someone who really shouldn't be getting one. Sometimes these things are done to promote a truly dishonest scenario, and sometimes they're done in an attempt to prove an unprovable truth. I'd say the latter happens at least as often as the former.
I believe that this person may or may not be qualified for the loan. Having the ability to pay a loan...and then having the organizational skills when it comes to paying bills in order to make sure that you write a check or get a receipt for rent MAY be in some kind of profile theat the lender has. There MAY be some kindo of statistic that says that over the years people that pay rent with cash and have no proof of it might be more likely then others not to be organized enough to pay all of their bills. I am not saying this is even close to the truth but I could see how a person that pays their bills with cash and don't keep good record keeping of this MAY be more likely to be less controlling of their finances.
Re: Re: Dishonest Loan Officers I disagree (no offense). For the cash-payer, these things are frequently *not* a matter of poor record keeping or irresponsibility, but rather a matter of being simply unaware that certain receipts would be necessary to keep. When I was in my twenties I rented an apartment from a private landlord (not a big management company) for several years. I usually paid her in cash, and she always gave me a receipt. Eventually I threw those receipts away. After all, there was no dispute between myself and my landlord, and if anyone ever needed to verify my rental history (like a future landlord, perhaps), she'd happily verify it for me. What need did I have to keep all those receipts? Having never been through the mortgage-application process myself, I had no idea until well into my thirties that rental receipts would ever be requested by a lender. I also had no idea until just recently that a landlord's verification wouldn't suffice unless the landlord was a "professional management company". So, if I'd applied for a mortgage when I was in, say, my early thirties, I wouldn't have had all my years of rental payment receipts. This doesn't mean I am irresponsible or a poor record keeper. It only means I was unaware of the necessity.
Re: Re: Dishonest Loan Officers So they pay their bills by cash - where is the sinister hand? The bills were paid weren't they? Isn't that all that matters? Or are the Lending Gods now going to dictate taht bills must be paid by check, then dictate the color of the check? I was recently declined credit because I disconnected myself from Qwest and only have a cell phone. The wouldn't lend to cell phone owners. I can't understand why, since I am only available to a landline phone in my home about 4 hours a weekday (the time between when I get home and when I fall asleep). The cell phone is in my pocket 18 hours a day. Which is the BETTER way to contact me when you want to contact me? $crew 'em, I paid cash for the computer somewhere else. Now, I guess I'm a bad credit risk since I paid cash.
Re: Re: Dishonest Loan Officers If people of a certain race tend to have a higher rate of foreclosing there are laws against discriminating against these peopole. If People that pay cash for their bills instead of keeping paper trails have a higher risk of defaulting on a mortgage then a lender (or fannie mae) may require them to pay a higher rate or not qualify for a program. The Golden rule applies..he who has the gold makes the rules. This is all abotu making money, day traders spend hours a day trying to find the little bits of info that they will hope makes them money on a company. Any little aspect of a company can make it a win or lose deal. If a lender has statistical data that cell phone only users tend to have problems then they have the right not to lend you their money. Are you the 1% that doesnt fit into the statisticts? Maybe. But as in every part of life it is sometimes the inoccent person that suffers. Their rules. Their money. And in this case it isnt that you CANT get a mortgage..it is just that you cant get the BEST or this PARTICULAR mortgage.
Re: Re: Dishonest Loan Officers Flyingifr, I suspect that they want you to have a land line because they know that if you fall behind they can't make collection calls to a cell phone. So they want a land line where they can harass you a little more legally.
Re: Re: Dishonest Loan Officers I can tell you just one person's perspective, from experience. I once owed a rental property. In fact, I have owned two of them in my life. But I learned my lesson and let a Realtor handle the second one. Here's my experience with the first: I had five tenants over the years. Two usually paid by check, three usually paid in cash. With the ones who paid by check, I had the check in my mail normally no later that the fifth of the month. Very few exceptions. With the three who paid cash, over half the time I had to track them down to get paid. And they wouldn't have the cash on them. They hadn't cashed their paycheck yet. The spouse was going to the bank later. Always some story. One of the tenants was military. I had to end up going to his commander and reporting him. So, from my experience (limited as it may be), I wouldn't have loaned money to the folks who paid in cash. They didn't keep track of their obligations and make an effort to pay on time. Those who wrote checks did. I'm not stereotyping or saying everyone fits this scenario, just another viewpoint from my experience.
You've pretty much summed up today's mortgage racket. If we all limited our mortgages to 25% of income, either home prices would be as cheap as they were 30 years ago or so few people would own homes that we'd be nearing an economic depression. When the fudging and corner-cutting began, who knows. Who started it? Well, who has the greatest compelling interest? Don't hate the player, hate the game.
Re: Re: Re: Dishonest Loan Officers The issue, though, wasn't really a matter of what rights the lender has to base their decisions on certain things. It was more about whether a certain line of thinking (which they may or may not even be using) was flawed. If someone were to assert that an individual is a higher credit risk simply because they've been in the habit of paying bills in cash, I'd say that's a flawed line of thinking. My grandparents are a perfect example. Never have, and never would, make a late payment in their lives. But they prefer to pay in cash whenever possible. They're old-fashioned folks from a small town environment, and in their view, it just makes everything simpler. Other people might view it as making things *less* simple, though. Depends. Different strokes and all. Doesn't mean a thing about their credit worthiness, and if a lender chose to believe it did, then that would be their right. They'd just be wrong.
Re: Re: Re: Dishonest Loan Officers If I might respectfully point something out... The habit of paying you in cash, in all probability, wasn't really the difference between your tenants. Odds are that the ones you had to chase around to get paid were also ones with poor payment history on their other bills, less stability in their employment history, etc. In other words, there were probably other indicators of flakiness that would make their cash-paying habits an irrelevant issue. If you encountered someone tomorrow who had a great reputation, a solid credit history, a stable job, and had never come even close to screwing over anyone in their lives, but they paid their bills in cash...I strongly suspect you wouldn't feel this same hesitation about loaning them money.
Re: Re: Re: Dishonest Loan Officers You say that your grandparents are an example and that if lenders think that cash paying consumers are less likeley to pay bills that they are wrong. I am sure that they have statistics and data to support their reasonings...your one story about your grandparents is not enough to back up what you are saying. If I see a blue sheep...it doesnt make all sheep blue. If you have statistical information that cash paying consumers are just as likely to pay as paper trailed consumers then i suppose you'd be able to back up your statement. I am stating what I believe MIGHT be a reasoning..and I know from experience that lenders do EVERYTHING for a reason.....even if the reason is obscure and hidden among a lot of garbage. I don;t want you to think that I am attacking you either..I am just trying to shed some light on why they MAY do what they do.
