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#2237006 - 05/20/20 03:22 PM Gift Cards From Seller to Buyer
Questions Offline
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Joined: Jun 2009
Posts: 88
We recently had a mortgage broker reach out to my financial institution. She asked how lenders viewed an increasing practice of sellers providing their buyer with gift cards to home improvement stores in lieu of physically performing repairs or for replacing appliances. She asked if we would consider this a type of mortgage fraud since this is not reflected on the closing statement.

We were completely unaware of this practice. It doesn't appear to be a RESPA issue since the exchange is not taking place with a settlement service provider. But should lenders account for this on the closing statement if we are made aware of this? If so, how would we do this?

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#2237011 - 05/20/20 03:31 PM Re: Gift Cards From Seller to Buyer Questions
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
It is not a part of the loan closing and totally involves an agreement between the buyer and seller. The lender is not involved.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2237133 - 05/22/20 12:43 PM Re: Gift Cards From Seller to Buyer rlcarey
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Joined: Jun 2009
Posts: 88
We were concerned that we may have an obligation to list this on the Closing Disclosure as Paid Outside of Closing, if the lender knew about the exchange. You think that is unnecessary?

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#2237136 - 05/22/20 12:59 PM Re: Gift Cards From Seller to Buyer Questions
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
I have a side agreement with the seller to repair a crack in the driveway - he hands me a gift card for $500. I am just not sure how that involves the loan transaction.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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