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#2143832 - 08/28/17 05:28 PM Gift of Equity from Seller (Dad)
ccman Offline
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Joined: Sep 2007
Posts: 937
Under the final amendments, will a gift of equity be shown as a Seller Credit ($128,000) on the LE as per .37 (h)(1)?
Since this is being provided by the seller, .37(h)(vii) and commentary does not seem to apply here? As for the CD it remains as a seller credit?

Prior to the final amendments, the gift of equity was only shown on the CD in Sec. L. Any thoughts.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2143838 - 08/28/17 05:43 PM Re: Gift of Equity from Seller (Dad) ccman
RR Joker Offline
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Posts: 20,654
The Swamp
Since the gift is from the seller, it should just effectively lower the price!
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#2143840 - 08/28/17 05:52 PM Re: Gift of Equity from Seller (Dad) ccman
Truffle Royale Offline

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ah, not really.
You're going to have an issue if you lower the sale price and the appraisal comes in that much too high because the loan will be made based on the lower of the two.
ex: Sale price 100,000/loan amount 80,000
Dad gives $20,000 equity and lowers sale price to 80,000, kid can only borrow 64,000.

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#2143850 - 08/28/17 06:18 PM Re: Gift of Equity from Seller (Dad) ccman
WMK368 Offline
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Joined: Jul 2017
Posts: 9
We recently just had a situation similar to this. On the LE, the gift of equity was disclosed in the Down Payment/Funds from Borrower under Calculating Cash to Close. On the CD, it is shown as a Gift of Equity in both Section L and Section N, where it is deducted from the seller's proceeds.

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#2143856 - 08/28/17 06:35 PM Re: Gift of Equity from Seller (Dad) WMK368
ccman Offline
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Joined: Sep 2007
Posts: 937
That's where this gift is shown on our LE. FNMA limits a "seller credit" to not more than 6% of the sales price. The bureau might want to compare notes with them on gifts of equity which is usually from someone that's part of the transaction like maybe the seller which is a family member. Thanks.

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#2143886 - 08/28/17 07:41 PM Re: Gift of Equity from Seller (Dad) ccman
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Oh well....here are a couple of other threads on this subject that may be useful.

https://www.bankersonline.com/forum/ubbthreads.php/ubb/showflat/Number/2114552/Searchpage/1/Main/235278/Words/%22gift+of+equity%22/Search/true/re-gift-of-equity#Post2114552



https://www.bankersonline.com/forum/ubbthreads.php/ubb/showflat/Number/2088104/Searchpage/1/Main/245272/Words/%22gift+of+equity%22/Search/true/re-disclosing-a-gift-of-equity#Post2088104
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#2143917 - 08/28/17 08:43 PM Re: Gift of Equity from Seller (Dad) ccman
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
TRID disclosures, how you would treat the loan for LTV issues and FNMA requirements are not related.
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