Lender is asking for 2 yrs of records on refinance after 6 months

17 Replies

Hi there,

I am refinancing a cash purchase after 6 months.  The lender is asking questions about transfers between accounts and 2 year records for others. I don’t recall having to do all this work last time I refinanced a property.  That previous propery was also a cash purchase but I waited a full year to refinance.  

This is not “delayed financing”,  as it will be over 6 months when we get their check.  Is it normal for a lender to dig so deep in my finances? Two years is going to be a tough one, I have opened and closed many accounts, and moved money right and left during that time.  I don't even think I can figure out the "paper trail" for two years myself! 

Could it be that this person is confusing the delayed financing requirements?   I will certianly ask them the question, but I wanted to check with BP first so I can get some insight on this.

Thanks, 

Frank

Originally posted by @Brooks Johnson :

Yeah that’s pretty standard. 2 years taxes, YTD PnLs but usually should only be 3-6months of bank statements etc.

Hi, 

The two year of tax records and W2s was easy. I sent that a long time ago.  

My concern is with the 2 year of account staments.  I gave them two months, if they want 6 sure, but 2 years  will be tough.

That's super weird. I'd get a second opinion from another lender looking through all the standard (eg, not 2 years of bank statements) paperwork. Are they trying to derive income from the bank statements because there isn't enough on tax returns?

Originally posted by @Chris Mason :

That's super weird. I'd get a second opinion from another lender looking through all the standard (eg, not 2 years of bank statements) paperwork. Are they trying to derive income from the bank statements because there isn't enough on tax returns?

Thanks for the message.  

It's not about income.  I can pay the mortgage without tenants, that's not an issue.   

I think they want some sort of trail of the funds used to buy the place cash six months ago.   If so, I can probably  pull account statements from before the purchase.   That's fine, but two years is a lot.   

This is not delayed financing. I didn't know that was also part of the refi.  I thought they only needed to see cash reserves.

Curiously, I don't recall any of this on the other property.  I used the  the same lender. 

I'll get on the phone with them.

Thanks, 

Frank

Originally posted by @Frank S. :
Originally posted by @Chris Mason:

That's super weird. I'd get a second opinion from another lender looking through all the standard (eg, not 2 years of bank statements) paperwork. Are they trying to derive income from the bank statements because there isn't enough on tax returns?

Thanks for the message.  

It's not about income.  I can pay the mortgage without tenants, that's not an issue.   

I think they want some sort of trail of the funds used to buy the place cash six months ago.   If so, I can probably  pull account statements from before the purchase.   That's fine, but two years is a lot.   

This is not delayed financing. I didn't know that was also part of the refi.  I thought they only needed to see cash reserves.

Curiously, I don't recall any of this on the other property.  I used the  the same lender. 

I'll get on the phone with them.

Thanks, 

Frank

 Call the lender and ask. We can only speculate. Let us know what you learn, and please tag me as I'm curious myself. 

agree with @Chris Mason ask them specifically what the deal is as this is NOT normal. 60 days is common, 90 days is about standard. I deal with 5MM+ loans every day and never heard of needing 2 years statements.

my only guess is something on your financials spooked them and they want to ensure the source of funding. Even if that were the case, it still seems strange. Is there any reason they don't want to loan to you? this request might be a poison pill sort of thing, just speculating here.

The best advice I can give is to start looking to the next lender who is easier to deal with

Originally posted by @Alexander Felice :

agree with @Chris Mason ask them specifically what the deal is as this is NOT normal. 60 days is common, 90 days is about standard. I deal with 5MM+ loans every day and never heard of needing 2 years statements.

my only guess is something on your financials spooked them and they want to ensure the source of funding. Even if that were the case, it still seems strange. Is there any reason they don't want to loan to you? this request might be a poison pill sort of thing, just speculating here.

The best advice I can give is to start looking to the next lender who is easier to deal with

I  wasn't the sweetest person throughout this process, but I don't see a reason why they would drop this loan.   It's a large bank.   I left them a message and will call again tomorrow.   At the end, they are the ones that gave me a huge chunk of the money from the previous refi.  I will update on their reason. 

Originally posted by @Alexander Felice :
@Frank Sanchez

Not accusing you in any way, just throwing everything I can think of out there.

 Oh,  no worries.  I didn't see that as a negative comment.  Honestly,  2 years of records is absurd.  I'm wondering if this was a typo. I left voicemails.  

Originally posted by @Frank S. :
Originally posted by @Chris Mason:

That's super weird. I'd get a second opinion from another lender looking through all the standard (eg, not 2 years of bank statements) paperwork. Are they trying to derive income from the bank statements because there isn't enough on tax returns?

Thanks for the message.  

It's not about income.  I can pay the mortgage without tenants, that's not an issue.   

I think they want some sort of trail of the funds used to buy the place cash six months ago.   If so, I can probably  pull account statements from before the purchase.   That's fine, but two years is a lot.   

This is not delayed financing. I didn't know that was also part of the refi.  I thought they only needed to see cash reserves.

Curiously, I don't recall any of this on the other property.  I used the  the same lender. 

I'll get on the phone with them.

Thanks, 

Frank

just provide the settlement statement where it shows you paid cash.. then on that day of settlment you probably wired money in to close since no one allows checks anymore..   ?????

Here is an update. 

The 2-year records were triggered by me transfering some funds to my wife's account.  They assume this was a business transaction and rather than asking "do you have other businesses" flagged every single possible account and transfer they could.  I had to provide a written stamtenet indicating I have no businesses.  

This is the absolute last time I use Citibank Mortgage for anything remotely related to my businesses.  They are absolutely horrible.  I am a returning costumer, I thought they were going to care for that. Boy, I was wrong!! This has been n absolutely painful experience. 

Their latests now is to reduce the loan to 63% ARV becuase... I can't figure it out, yet.

I ask myself the same question. Maybe to save time,  I guess.  I'm far into the process.  Also, I negotiated a refi rate at 5.625% and I am getting a $1,000 credit. 

We are currently in underwriting.   I guess I'll have to eat the appraisal and processing fees if I cancel.   What else do I have to pay if I tell them to take a walk? 

Thanks, 

Frank

@Frank S.  As a general rule of thumb you'll find most larger banks more difficult to work with, especially if you own your own business. They're just a lot tighter with guidelines and have more overlays than your smaller lenders.

If you cancel now you'll be out your appraisal money, but in terms of time as long as you find a good lender you may even close sooner than with Citi. Being in underwriting doesn't really mean all that much, as long as you're able to get your documents in quickly a loan officer that knows what he's doing can get you from initial conversation to underwriting in 24 hours.

Ouch,  24 hours! I'm reaching 8 weeks.  This was supposed to be an easy loan.