What are a borrower’s rights regarding documentation need for a mortgage approval?
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What are a borrower’s rights regarding documentation need for a mortgage approval?
My husband’s father’s LLC recently purchased real estate from my husband. Now we are in the process of purchasing a new home and the mortgage underwriter wants proof that my husband has no interest in the LLC that now owns the old property. The underwriter has asked for a copy of the operating agreement that has the LLC members listed. However, my father-in-law thinks that it’s not right that he has to disclose his business documents for a transaction that is unrelated to his business. Is there another way to prove that my husband is not a member and has no interest in the father’s LLC? The clerk’s office at the state corporation commission does not require disclosure of members for LLC’s, they only have proof that the LLC exists.
Asked on December 5, 2013 under Real Estate Law, Virginia
Answers:
Terence Fenelon / Law Offices of Terence Fenelon
Answered 10 years ago | Contributor
The inderwriter is seeking proof that their no longer exists any financial exposure which could compromise their ability to collect on the proposed mortgage. Your option might be to seek a new lender, but the results are likely to be the same.
Personally, I am surprised that the lender doesn't merely accept a Hud-1 to verify the transaction and move on. In today's financial enviroment, the lenders call the shots.
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