earnest money

Posted By: theloanbug

earnest money - 08/11/22 07:57 PM

Does earnest money have to show on the closing disclosure? It is shown on the LE.
Posted By: raitchjay

Re: earnest money - 08/11/22 08:01 PM

Yes, otherwise your cash to close won't be correct.
Posted By: rlcarey

Re: earnest money - 08/11/22 08:10 PM

Earnest money is a Deposit - Summaries of Transaction - Section L - Line1
Posted By: theloanbug

Re: earnest money - 08/11/22 08:24 PM

The earnest money is only on the buyer's side in this particular case and I think he may already received it back.
Posted By: raitchjay

Re: earnest money - 08/11/22 08:37 PM

Why would he receive it back? Normally, (at least around here) it just goes toward the purchase price and counts as money already paid toward the purchase.
Posted By: theloanbug

Re: earnest money - 08/11/22 08:40 PM

This one did not go toward purchase price.
Posted By: raitchjay

Re: earnest money - 08/11/22 08:41 PM

I'm really confused...what did it go towards?
Posted By: raitchjay

Re: earnest money - 08/11/22 08:43 PM

I guess to try to answer the question though.....if he paid X amount of dollars as a "deposit" and then that deposit was handed back to him later, then there's nothing to enter as a deposit on the Closing Disclosure, as ultimately, there was no deposit made. I've just never heard of or experienced that scenario.
Posted By: theloanbug

Re: earnest money - 08/11/22 08:44 PM

I think I got it. Thanks
Posted By: raitchjay

Re: earnest money - 08/11/22 08:58 PM

I do get that earnest money can go back to the buyer if the deal falls through....but you wouldn't be issuing a CD if the deal fell through.
Posted By: rlcarey

Re: earnest money - 08/11/22 09:05 PM

What happens to the earnest money deposit is a matter of the purchasing contract and the agreement between the buyer and the seller. The bank has no say in the matter as to how it is treated as long as the lender and settlement agent properly accounts for whatever is happening at the loan closing.
Posted By: raitchjay

Re: earnest money - 08/11/22 09:10 PM

I wasn't trying to imply that the bank could interfere.....i've just never seen a TRID RE purchase where the earnest money was given back to the buyer before the loan closing. I do agree that it's all a matter of the contract.
Posted By: rlcarey

Re: earnest money - 08/11/22 10:11 PM

raichjay - I was really not trying to imply that you were. It is just that we lack the information necessary to make any judgement on the situation
Posted By: theloanbug

Re: earnest money - 08/12/22 05:30 AM

What happens if Realtor is not able to send earnest money on closing date? Can lender close?
Posted By: rlcarey

Re: earnest money - 08/12/22 10:50 AM

Well, that would seem to be a violation of their fiduciary duties. You would have to ask the borrower what they wanted to do after the borrower consulted with their own legal counsel. Not knowing what State you are in or what type of purchase agreement this is, leaves us in a position to not be able to answer your question. You seem to be having questions on a situation that is unusual, it might be better to get your legal counsel involved also. Typically, a realtor is not allowed to hold an earnest money deposit as they are not a disinterested third party.
Posted By: theloanbug

Re: earnest money - 08/12/22 11:02 AM

Ok. Thank you. Borrower is fine because they know the situation but thank you.
Posted By: theloanbug

Re: earnest money - 08/12/22 12:24 PM

It all has worked out. Thanks.