“YES, You have to Source Large CASH Deposits”

“YES, You have to Source Large CASH Deposits”

 

 

Anyone in the mortgage business will cringe when we are told “we deposited $25,000 in cash last week”. Of course I need to ask where this money came from, “it was a gift from my parents”. You can’t be doing stuff like this as it creates all kinds of problems, including Big Brother is watching.

 

Sure, we know that cash deposits are done all the time, there are all kinds of Federal laws and agencies that take notice when large deposits happen. Sure we know that this was done with all go intension, but I can’t do a pre-qualification at this time, as we need money to purchase, but these cash dollars can’t be sourced.

 

Fortunately, waiting a couple of months isn’t an issue, as they do not have a property in mind. A couple of months from now, they will be handed the pre-qualification.

 

Would you have done anything differently?

 

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Comment balloon 27 commentsJoe Petrowsky • October 10 2015 03:50AM

Comments

Good morning Joe.  Staying away from the ever seeing eye of the federal government is the right way to go.  Once they step foot in your door you have problems.  

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) about 4 years ago

First thing anyone should be before starting to look for a home is to get in touch with a great lender like Joe Petrowsky - then you know your transaction will go smoothly! 

Posted by Lise Howe, Assoc. Broker in DC, MD, VA and attorney in DC (Keller Williams Capital Properties) about 4 years ago

Yes, I can see how this could be an issue.  It would have been better to do as a check...for both.  Parents can take a tax deduction, too.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) about 4 years ago

Hi Joe.  Can't you verify from the parents accounts for the source of the cash?

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 4 years ago

Good moring Joe. Some things change: others never do. Have a great day.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 4 years ago

Good morning, Joe Petrowsky buyers do the damndest things.... and they always do it at the worst time.... 

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) about 4 years ago

I'm not buying anything or looking for a mortgage, just waiting for the day I can deposit $25,000 in cash.....and I don't think it's ever coming Joe.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) about 4 years ago

Good morning Joe,

There are just to many eyes watching for on to make a mistake. Yes you did it correctly.

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) about 4 years ago

I advise my clients to be very complete and clear when speaking to their mortgage rep --- ran into issues this summer on this very topic and closings were held up as a result.  

Posted by Jeanne Feenick, Basking Ridge, Warren, Bridgewater Market Expert (NextHome Premier) about 4 years ago

Joe Petrowsky It's a damn shame that the government would like to discontinue cash altogether. But we have to play that game.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 4 years ago

Hi Joe -- when it comes to down payments, it's not just about showing the money but documenting the source(s) too.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 about 4 years ago

People oftem act first....and think they are doing the very best thing they can to prepare for a home purchase...to find out...they should have asked first.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) about 4 years ago

Hi Joe, Just before moving to Virginia and closing on my house here I sold a piece of jewelry.  I called my mortgage broker and asked and she told me not to deposit more than $500.00 at a time.  She told me it was good that I asked.

Posted by Sybil Campbell, REALTOR® ABR, SFR, SRES Williamsburg, Virginia (Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia) about 4 years ago

Aren't those bags of cash fun, Joe.  I once had one with a suitcase full of the dollars...I decided not to do business with him.

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 4 years ago

It is good reading for prospective home buyers. Many make mistakes with bank deposits.

Posted by Roy Kelley (Realty Group Referrals) about 4 years ago

Hi Joe - I have heard this is a problem.  Others have called it seasoned money.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 4 years ago

In this day and age, no doubt Joe. I have had issues like this with clients where the lender called me about a red flag.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) about 4 years ago

Joe,

You make a good point, and Big Brother does not like this kind of activity.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) about 4 years ago

I had a client in the nail business that took in lots of cash. He intended to put down $20,000 and had to deposit it into a bank acount over a few weeks time then wait for the money to season. It all worked out but he just didn't understand why it mattered. It was his money that he earned. No amount of explaining could get him straight. Time passed and he closed. I am glad he had to time to wait too.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) about 4 years ago

Once again, proof positive why Realtors need to get their clients to work with a professional lender EARLY in the transaction to avoid or overcome this sort of issue.   This is why I ask lots of questions when pre-approving my clients.   

Posted by DEANNA EARLY - - ( NMLS # 268590 ), Highest Ranked Mortgage Loan Originator Virginia (American National Bank & Trust) about 4 years ago

Joe excellent point what is it six months to season the cash??? What if I just came from a foreign country and have a couple steamer trunk full of money... and I would like to buy that 10 million dollar home? Can you help me ?:)))Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) about 4 years ago

Joe, there is really nothing else they can do.  Cash may be KING, but not when it comes to applying for a loan.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 4 years ago

Joe 

Your post is right  on point . . . . large cash deposits need to be sourced.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 4 years ago

How long before desposits are seasoned and don't have to be sourced?

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) about 4 years ago

Hi Joe Petrowsky 

I had a client who ran a tax business and took in a lot of cash. The lender was doing a loan for $100K and she was putting down $350K cash but they were so upset when she kept depositing cash. The one account was her business account but the major bank almost refused the loan as they felt she was hiding money or maybe laundering it. How could I tell her not to make her cash and check deposits on a daily business. Cash is King but not for banks!

Posted by Kristin Hamilton CA Realtor, (909) 557-6966- Specialize 55+ Communties Banning (Sun Lakes Realty) about 4 years ago

It's always an issue when the lumpy mattress is raided and they want to make the lumps the down payment

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 4 years ago

"See you in 3 months!"

Posted by Mike Sasse, Sales Leader (OfferPad Home Loans, LLC) about 4 years ago

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