Proof Of Funds Letter Not Permitted?
| July 1st, 2009A proof of funds letter can be referred to by many names in addition to the normal meaning of a letter that states you have funds available to complete a transaction. A proof of funds letter is commonly used in property short sale and REO purchases to provide explanation that the purchaser or buyer has the ability to purchase the property they are making an offer on.
Understandably, the now overworked loss mitigation or short sale negotiators wish to be sure that they are working with a buyer that may perform. They need to know the buyer has the assets if an understanding can be bartered on the estate property.
A “leased proof of funds letter” appertains to monies being deposited into a clients private or business deposit account by an investor for an agreed upon fee. The bank “blocks” the money so that it is not permitted to be withdrawn by the client; however the money is in the account to show explanation of funds. Extra terms used for this kind of transaction are “standby letter of credit” and “blocked funds letter”.
The WSJ said that the U.S. Lawyer’s office claimed “persons who were looking to temporarily lease funds in order to enhance their creditworthiness when applying for loans were instead provided with false proof-of-funds letters on bank stationary showing the funds had been deposited in their accounts.”
Needless to assert, it is urgent to grasp the difference in the type of proof of funds letter acquired. If you have access to private funds, HELOC loans or funds that can be borrowed from buddies or family, then providing bank records would supply the obligatory “proof of funds letter” documentation.
If inquisitive about bonafide “transaction funding” or “acquisition funding” for short sales or REO flips, a standard “proof of funds letter” can be acquired. Look for a bank or investor that is providing transaction funds for the total amount of the purchase price regardless of your cash or credit situation. Generally an acquisition funding fee is between 2-5% of the total of funds used to flip the property at a “double” or “simultaneous” close. This {cost|charge|fee| is taken from profits at the closing.
Learn how to obtain legitimate guaranteed transaction funding with no cash or credit needed. Do you need a proof of funds letter? Learn about Transaction Funding and visit www.WeProvideTheFunds.com
Other sites worth checking out:
Proof Of Funds Letter With Transaction Funding
Funding Short Sale Deals With Transactional Funding
Proof Of Funds Letter - What Are They?
