Proof of Funds (POF) and Closing Question

6 Replies

We have an REO under contract and used our company bank statement as POF. We funded escrow from the same account. We've decided that we want to have one of our private lenders fund the deal, instead of using our own funds. Has anyone ever run into an issue at closing with the funds to close coming from a different name/account than originally used for POF? It seems like, as long as there is no assignment or any other fishy looking items on the HUD, they should care less, since the POF was just needed to make sure the buyer was qualified to close in the first place.

Originally posted by @Cheyenne Davis :

We have an REO under contract and used our company bank statement as POF. We funded escrow from the same account. We've decided that we want to have one of our private lenders fund the deal, instead of using our own funds. Has anyone ever run into an issue at closing with the funds to close coming from a different name/account than originally used for POF? It seems like, as long as there is no assignment or any other fishy looking items on the HUD, they should care less, since the POF was just needed to make sure the buyer was qualified to close in the first place.

 That is correct.  

Correct, meaning "It seems like, as long as there is no assignment or any other fishy looking items on the HUD, they should care less, since the POF was just needed to make sure the buyer was qualified to close in the first place"? Correct? :)

They don't care where it comes from at the closing; they just want the greenbacks.

They just want the check AMOUNT to be correct, they don't care where it comes from. a POF can be as simple as a banker writing on letterhead. It's a nothing piece of paper really.

A couple questions:

What bank owns the REO currently? Who is doing the closing your title company or the one the bank chose?

In theory yes you can switch the funding source, the FL contract actually says as much under the cash option check box. But if it's a FNMA Hompath REO that 18 page addendum you'll sign says any change in funding source is a breach and they can kill the deal.

And yes they will try to, I know because I did exactly what you described even though it didn't change any of the closing costs for them. Maybe I could have fought it but I had a 10K EMD on the line and the fight would have been more expensive than what I ended up doing. I let their title close the front end, and my attorney who was doing the note/mortgage closed the back end and wired them the money. So it "looked" like a cash purchase.

It cost me about $300 to have my attorney do it, but saved the deal. Next time I'm writing my offer with my title company as closer so that I don't have issues like this.

Matt,

MIDFIRST BANK owns the property. It's not a Fannie Homepath, but thanks for the info on those deals. Good to know.

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