A home buyer who cannot meet the modest cash reserve requirements of lenders, and borrows someone elses bank account, should not be buying a house.

Borrowing a Bank Account to Purchase a House
April 16, 2007

"I am in the market for a home. I have good credit, but not the substantial assets needed to get a good rate. I know a real estate attorney who will temporarily move me on to one of his bank accounts so I will be able to show stronger reserves. He charges a small fee for this, and once the deal is funded I will be removed from his account. I really need to know if this transaction is 100% legit?"

How can showing someone else’s money as your own be legit? When you sign the mortgage application, attesting to the truthfulness of the information shown there, you will be perjuring yourself.

And to no purpose. Showing higher cash reserves will not get you a better price unless you use the reserves to increase your down payment. This you can’t do because the money is not yours to be used.

Lenders do want borrowers to have a cash reserve on top of the cash required for down payment and settlement costs. Flashing someone else’s bank account as your own could meet that requirement. But this required reserve is extremely modest, typically amounting to no more than 2 or 3 monthly payments.

When you buy a house, you can be 100% certain that unanticipated expenses will arise. That is what the reserve requirement imposed by lenders is about. If you can’t meet their modest requirements with your own funds, you should seriously reconsider whether you are ready to purchase a house.

And that lawyer ought to be disbarred.
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