Therefore, if the loan application requires the borrower to provide the lender with the entire purchase and sale agreement, the entire purchase and sale agreement, including all exhibits, should be provided. If the loan application requires the borrower to update all required loan information, this would mean that all amendments to the purchase and sale agreement should be provided to the lender. With the law criminalizing material omissions, any other answer is fraught with legal risk.
It should be noted that some REALTORS may be needlessly getting their borrowers into trouble by providing the lender with information the mortgage lender is not requesting. For example, most mortgage lenders do not require a copy of an inspection report on the property if it is not a part of the purchase and sale agreement. However, they usually require a copy of all amendments to the contract. Therefore, if the inspection report is made an exhibit to the Amendment to Address Concerns With Property, and, thus made a part of the purchase and sale agreement, the report would have to be provided to the lender. While the report may not have been required, once the lender has it, the lender will likely consider it. In so doing, this may create problems for the borrower that might have been avoided had the report not been made a part of the contract.
What is the solution here?
Obviously, if the lender does not require a copy of the property inspection report, it would make the most sense for the buyer to ask for specific repairs to the property without incorporating the inspection report into the Amendment to Address Concerns with Property.
What is the solution here? Obviously, if the lender does not require a copy of the property inspection report, it would make the most sense for the buyer to ask for specific repairs to the property without incorporating the inspection report into the Amendment to Address Concerns with Property. In this way, the report is not a part of the purchase and sale agreement and does not have to be provided to the lender. Of course, the inspection report can still be provided to the seller if the seller wishes to see it. However, it can simply be sent to the seller rather than making it part of an exhibit to an amendment to the contract.
Before discussing the second example of the seller increasing the sales price to create a better comparable, it should be noted that the Residential Mortgage Loan Act has now been tested in court and we are starting to be some appellate court interpretations of that statute.
The case of Gilford v. State, 295 GA. App. 651 (2009) is clearly the most significant case in this area. In Gilford a borrower falsely stated that none of the $13,000 down payment was borrowed. However, the money for the down payment was advanced to the borrower by Gilford, who was a mortgage loan officer, prior to closing. Clearly, this made the borrower liable for mortgage fraud. Gilford worked for Countrywide Home Loans, where the borrower initially applied for a residential home loan. The borrower was turned down for the loan because she had in sufficient funds to close. The borrower then submitted another loan application to New Century Mortgage Corporation. Although Gilford did not work for New Century Mortgage, the paralegal who worked for the law firm which closed the loan testified that Gilford was the loan officer responsible for the sale. The closing attorney also testified that he talked with Gilford “in coordinating some parts of the closing”. Investigators discovered that $13,000 had been withdrawn from Gilford’s account on March 28, 2006. The next day, three different deposits were made at three separate bank branches into the borrower’s account.
After being convicted of mortgage fraud by a trial court, Gilford appealed her conviction to the Georgia Court of Appeals. She argued that there was no evidence she knowingly made any deliberate misstatement or misrepresentation during the loan application process. While Gilford may have assisted the borrower in defrauding the lender, Gilford’s argument appeared to be that she could not be guilty because she was not the one making direct misstatements to the lender.
www.garealtor.com GEORGIA REALTOR I 17
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