E-hellions...my DH said I should talk to this group of level-headed folks.
About 3 months ago, a friend asked me for a loan of $5K as part of a down payment for a house. She made it clear that it was a loan, that she expected to pay it back, and that it was all acceptable under the specific loan program she was participating in. While we did not say "yes," I left it as open.
We'd occassionally exchange FB messages about the topic, the loan program, the house, and the fact that she wasn't really sure that she'd need the money.
Two days ago, she sent me an excited FB message that the offer was accepted, the loan approved, and "just send the check to me because closing is on the 16th. Or wire it."
I sent back a couple of queries - how was the mortgage broker handling this, what documentation would be required to affirm that it is a loan. She wasn't exactly forthcoming but said "If you send the check I'll deposit in my account then give it to my mom, then she will write me a check for it for closing."
I looked into the loan program that she said she was participating in, and it's pretty clear that if money comes from me to her, I have to sign a "gift letter" that says exactly that - it's a gift, I never am going to get paid back, happy house, etc. etc. I said I wanted to talk to her and her mortgage broker, and she didn't get back to me until later today, saying that she had been busy and could we talk tomorrow.
I responded that, after looking at the loan program, that any money I give her is considered a gift and not a personal loan and that our verbal agreement was that this was a loan to her. She replied that yes, for purposes of getting the real estate loan, it was considered a gift but that she personally was going to treat it as a loan and was going to pay it back.
OK. Thanks for staying with me.
Look, there is no way I can do this. First of all, and not to get into legal territory, but it sounds like mortgage fraud to me. Second of all, it went from being a personal loan to a "gift" with a wink-wink & that would be completely unenforcable as a personal loan plus, you know, dishonest and all.
The only POSSIBLE suggestion I can come it with is that I loan the money to her mother and her mother gifts it to her - but why I am I trying to find a solution to this?
I need...I need the language for this painful call tomorrow. I know full well if I don't give her the money, the deal is gone, no house for her.
"Debbie, our understanding all along was that this is a personal loan and not a gift. You are asking me to sign a legally binding document that says it's a gift. That's a pretty big change. We can't do this."
What do you think? Questions, comments, corrections, word-smithing?
Thanks in advance from both of us.