One of our biggest hold-ups at closing is accounting for every dollar used for down payment and closing costs (funds to close). Lenders are now required to paper-trail every dollar used. This means every large deposit has to be “sourced” and every check to escrow has to come from a verified account (both withdrawals and deposits have to be paper-trailed).

Borrowers get confused b/c this also precludes them from moving funds from account to account. For example if we verify $100,000 in a B of A account and $100,000 in a Wells Fargo account at the beginning of an escrow, the borrower is not allowed to write a check larger than $100,000 to escrow from either account, without showing where the funds came from.

Borrowers cannot simply move all their money from Wells to B of A and write one check for $200,000, unless they show a detailed paper-trail. For well-healed borrowers with ample assets, this entire process is extremely frustrating but it is a hard and fast requirement for all lenders since 2009.

The simplest solution is to avoid moving funds as much as humanly possible.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646

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