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#2185832 - 07/18/18 02:39 PM
Re: Gift of Equity
violet
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Posts: 83,363
Galveston, TX
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As an adjustment.
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#2185836 - 07/18/18 02:41 PM
Re: Gift of Equity
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Land Lacking in Lakes, IL
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Last edited by MScarn6942; 07/18/18 02:41 PM. Reason: added first line
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#2185843 - 07/18/18 02:50 PM
Re: Gift of Equity
violet
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Power Poster
Joined: Sep 2010
Posts: 2,658
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From the preamble to the 2017 TRID amendments:
"Final comment 37(h)(1)(vii)-1 clarifies that amounts expected to be paid at consummation by third parties not otherwise associated with the transaction, such as gifts from family members and not otherwise identified under § 1026.37(h)(1), are included in the amount disclosed under § 1026.37(h)(1)(vii), although amounts expected to be provided in advance of consummation by third parties, including family members, not otherwise associated with the transaction are not required to be disclosed under § 1026.37(h)(1)(vii)."
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Adam Witmer, CRCM All statements are my opinion, not those of my employer, and should not be taken as legal advice. www.compliancecohort.com
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#2185856 - 07/18/18 03:31 PM
Re: Gift of Equity
violet
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Posts: 83,363
Galveston, TX
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Adam, a gift of equity is usually provided by the seller. As such, your citation which includes "paid at consummation by third parties not otherwise associated with the transaction" might not work.
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#2185861 - 07/18/18 03:44 PM
Re: Gift of Equity
violet
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The Swamp
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Or, the sales price may simply be lowered if the 'gift' is coming from a seller. Unless there is some true documented sweat equity or there was a contract where the buyer was renting and paying above market and that above market portion was going towards a 'down payment/equity'...I just don't see how a gift of equity can make up for a down payment and is just asking for inflated prices to cover the lack of dp funds.
my two cents.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#2185928 - 07/18/18 06:07 PM
Re: Gift of Equity
violet
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Joined: Sep 2010
Posts: 2,658
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Agreed.
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Adam Witmer, CRCM All statements are my opinion, not those of my employer, and should not be taken as legal advice. www.compliancecohort.com
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#2192458 - 09/13/18 04:24 PM
Re: Gift of Equity
violet
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Power Poster
Joined: Sep 2004
Posts: 5,249
out of the frying pan...
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One of these landed on my desk today. Sales price is $63,000, with an $18,000 'gift of equity' from the seller to make the amount due from buyer (and our loan amount) $45,000. Is the consensus that this goes on the seller credit line or as an adjustment - assuming we can make our software do that? I've read both of these threads and that section of reg through a couple of times and am still confused.
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#2192470 - 09/13/18 05:37 PM
Re: Gift of Equity
RR Joker
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Posts: 20,656
The Swamp
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Or, the sales price may simply be lowered if the 'gift' is coming from a seller. Unless there is some true documented sweat equity or there was a contract where the buyer was renting and paying above market and that above market portion was going towards a 'down payment/equity'...I just don't see how a gift of equity can make up for a down payment and is just asking for inflated prices to cover the lack of dp funds.
my two cents. I remain of this opinion.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#2192486 - 09/13/18 06:15 PM
Re: Gift of Equity
violet
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Joined: Nov 2002
Posts: 20,656
The Swamp
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It wouldn't. It would simply end up a lower sales price If you are going to do a fake downpayment then I guess you have no choice but to show it as an adjustment.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#2192504 - 09/13/18 07:29 PM
Re: Gift of Equity
violet
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Power Poster
Joined: Sep 2004
Posts: 5,249
out of the frying pan...
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Neither of those. It's a family transaction, and the seller is wanting to show a higher purchase price + the gift to reduce the amount the buyer has to bring to closing. Personally I think it's all a load of bunk, but if the LO allows it and management allows him to allow it then all I can do is figure out how to show it.
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You call it ADD. I call it multi-tasking.
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#2192511 - 09/13/18 07:47 PM
Re: Gift of Equity
violet
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Load of bunk is right.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#2192556 - 09/14/18 11:48 AM
Re: Gift of Equity
violet
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Joined: Jul 2001
Posts: 83,363
Galveston, TX
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Just remember, how you account for the required SLTV of the transaction has nothing to do with the consumer's disclosures.
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