Author Topic: The loan request.  (Read 3715 times)

0 Members and 1 Guest are viewing this topic.

guihong

  • Super Hero!
  • ****
  • Posts: 6488
Re: The loan request.
« Reply #15 on: June 04, 2014, 11:25:39 PM »
Friendships break up on Judge Judy every single day over just such a convoluted sceme as this.  I second (third?) Purple's wording.  I think that's a pretty nervy request to ask a friend.



jedikaiti

  • Swiss Army Nerd
  • Hero Member
  • ***
  • Posts: 2712
  • A pie in the hand is worth two in the mail.
Re: The loan request.
« Reply #16 on: June 04, 2014, 11:26:30 PM »
I think you should go with purple's wording to make it clear that the $5000. isn't on the table anymore.

Why would she need to deposit the check in her account then give it to her mother to give to her?  That part makes no sense to me.

This friendship may be over either way.  If you give the money and don't get paid back you'll end it.  If you don't give the money she may be very angry and end it.  I am sorry you are in this position.

That is a very good question. When I was getting a mortgage at the end of last year, I had to hand over bank statements and account for any significant amount, which this would certainly be!
What part of v_e = \sqrt{\frac{2GM}{r}} don't you understand? It's only rocket science!

"The problem with re-examining your brilliant ideas is that more often than not, you discover they are the intellectual equivalent of saying, 'Hold my beer and watch this!'" - Cindy Couture

LifeOnPluto

  • Super Hero!
  • ****
  • Posts: 6499
    • Blog
Re: The loan request.
« Reply #17 on: June 04, 2014, 11:30:45 PM »
I too, think your wording is fine.

I suspect your friend will try to argue "Oh, but it doesn't matter what the document says! I still intend to pay it back to you."

In which case, I'd tell her straight out "I'm not comfortable with an informal agreement. I'd hate for something to go wrong, and for you to get in trouble OR for our friendship to end."

She might also try to guilt trip you. "Oh, this means I won't get to buy the house! You've spoilt my plans/dreams/whatever." But stay strong. She was wrong for not giving you all the facts upfront.


It sounds like she deliberately misled OP about the circumstances of the loan. It wasn't until she was confronted that she admitted that it was expected to be a gift for the purposes of her mortgage. She now wants OP to lie for her, in ways that could bite the OP more than her. Also OP was doing her a big favour and she seems to have no appreciation of that, based on the info provided. That's not behaviour that would encourage me to want to loan her the money at all now, even if she signed a contract. Words like bait and switch come to mind. Red flags.


I completely agree with this. I'd be pulling back from this "friendship", frankly.

Kaypeep

  • Hero Member
  • ***
  • Posts: 2281
Re: The loan request.
« Reply #18 on: June 04, 2014, 11:33:00 PM »
This isn't a lot of money in the scheme of buying a house, I'd be wary that she needs to borrow it from a friend and can't just take a loan from her 401K/retirement plan or something like that.  Add in the fact that all legal documentation would list it as a gift.  Nope, not kosher.  She did a poor job communicating how this would go down, and as a result, you know see it's not possible.  If this transaction is make or break based on your $5K then perhaps she shouldn't be buying this house.

doodlemor

  • Hero Member
  • ***
  • Posts: 2165
Re: The loan request.
« Reply #19 on: June 04, 2014, 11:41:31 PM »
This isn't a lot of money in the scheme of buying a house, I'd be wary that she needs to borrow it from a friend and can't just take a loan from her 401K/retirement plan or something like that.  Add in the fact that all legal documentation would list it as a gift.  Nope, not kosher.  She did a poor job communicating how this would go down, and as a result, you know see it's not possible.  If this transaction is make or break based on your $5K then perhaps she shouldn't be buying this house.

Yup to all of this, too.  If she is solvent, she should be able to get the 5k from somewhere else.

sammycat

  • Super Hero!
  • ****
  • Posts: 6034
Re: The loan request.
« Reply #20 on: June 04, 2014, 11:44:36 PM »
The way I see it, the friendship is very likely to end anyway. Either now/sooner because the friend is upset that the money isn't forthcoming, or later because it isn't repaid (if it had been leant). I'm.not saying the friend is deliberately setting out not to repay OP, but sometimes things happen, and repaying a friend can get pushed to the bottom of the list.

If I'm going to lose a friend anyway, I'd rather not lose my money as well, which is why I'm glad to see that OP has decided against the loan, for the reasons previous posters have stated.

Amara

  • Hero Member
  • ***
  • Posts: 2526
Re: The loan request.
« Reply #21 on: June 04, 2014, 11:45:11 PM »
I think your friendship is dead regardless of your decision. But I also think the only right decision for you, that you two made already, is to decline. Firmly. Quickly. No JADEing. It'll at least make the pain end faster than if you try to justify your decision or "make it easer" for her to hear.

CharlieBraun

  • Member
  • **
  • Posts: 638
Re: The loan request.
« Reply #22 on: June 04, 2014, 11:46:48 PM »
Thank you very kindly, everyone.  I will update you tomorrow.  We are on vacation right now with the doggy and are getting up early to head to the beach and watch the sunrise, drink coffee and eat breakfast sandwiches and watch the waves, spend some time wading, then returning to the house to make the call.

I've very appreciative of everyone who offered their insight.
"We ate the pies."

JenJay

  • I'm a nonconformist who doesn't conform to the prevailing standards of nonconformity.
  • Super Hero!
  • ****
  • Posts: 5900
Re: The loan request.
« Reply #23 on: June 05, 2014, 12:07:36 AM »
There's no way she can deposit $5k into her checking account and then somehow get it to her mom without the bank seeing that she got/spent that money. The only thing I can think of is that she intentionally waited until the last minute to get the money so that the most recent bank statements won't show the transaction yet by the time she closes, or, it's going to be "Oops, can you make that out to my mom? I guess you can't give it to me after all." Hinky.

When DH and I bought our first home his dad did gift us some cash toward closings and the banks still wanted to see not only our statements but FIL's too. I guess they were worried we'd obtained the money via a loan or credit card, slipped it to FIL, then had FIL slip it back. Which is exactly what your friend is proposing. These two women are trying to outsmart the bank and it's not going to work. I wouldn't want to be anywhere near this.

She must have assumed you were planning to send $5k on her honor and not get anything in writing. I really like your wording. I would probably add something like "My offer was for a loan, legally binding  and including a repayment plan. I'm afraid I cannot sign documents stating I am gifting you $5k." She intentionally "misunderstood" your offer because she assumed when it came down to it you'd feel bad and give her the money anyway. If she loses this deal it's 100% her own fault and she needs to be held accountable for what she's trying to do, which is manipulate both you and the mortgage industry.

shhh its me

  • Super Hero!
  • ****
  • Posts: 6900
Re: The loan request.
« Reply #24 on: June 05, 2014, 12:09:04 AM »
I think you should go with purple's wording to make it clear that the $5000. isn't on the table anymore.

Why would she need to deposit the check in her account then give it to her mother to give to her?  That part makes no sense to me.

This friendship may be over either way.  If you give the money and don't get paid back you'll end it.  If you don't give the money she may be very angry and end it.  I am sorry you are in this position.

That is a very good question. When I was getting a mortgage at the end of last year, I had to hand over bank statements and account for any significant amount, which this would certainly be!

What I think.....

Friends mom will be doing the "gifting" on paper.  Friend may or may not use her bank account maybe she'll decide to deposit it in her moms account.  IF the $5,000 goes in and out and is not counted as assists it may not make a difference to the lender.

Why the lender wants it to be a gift and not a loan....

1) most importantly a loan toward any portion of down payment may create a "lender with claim on the home"   
2) they want the borrower to actually have a downpayment.  AS it looks like they are willing to take the gift from her mom this is a non issue ethically IMHO
3) the loan repayment will not be counted in her income to payment ratio.  It depends on the payment reschedule how much this will effect the ratio so it may be a big issue or not an issue at all. 

lenders don't tend to mind "wink wink" loans from mom as long as mom is willing to officially assign it as a gift.  Mom has no , zero nadda legal redress if the loan goes unpaid.  The lender doesnt care if you pay mom back or stiff her.  Lenders normally check the accounts of the gifter too , to make sure they have the money to give and that they didn't borrow it.  **People who lend money can in general try to take back what you bought with borrowed funds for a short amount of time, even credit cards or personal loans even if you file bankruptcy. Its not easy its not normally worth pursuing but the theory applies.  I don't mean this as legal advise just explaining the lenders position**  Lenders don't like gifts from friends , they don't have plausible dependability  to claim "we did not know it was a loan" IF you're a billionaire you can give someone $20,000 for a down payment but the don't buy "Mrs Smith who earns $60,000 a year gave her pal Sue $5,000 no strings attached" . Charities can give gifts as down payments , you can use lottery winnings, you can sell your baseball card collection etc , you just can't borrow it from an unapproved source. 

I wouldn't like my friend being caggy about telling me what they were planing.  I would be very concerned about the payment schedule, houses always have unexpected expenses.  $5,000 is a lot of money , how long will it take her to pay you back ?  is that set?  $100 would take more then 4 years if she plans on paying it faster then why does she need the loan( this is based on the common occurrence  that buying a home increases a person minimum monthly expenses if she plans on paying you $250 a month and her bills with be $250-500 a month more , why didn't she save up the $5,000)

GrammarNerd

  • Member
  • **
  • Posts: 569
Re: The loan request.
« Reply #25 on: June 05, 2014, 12:30:36 AM »
"I've always intended for this to be a loan, because we just can't afford to give away $5000.  And with a loan, it needs to be treated like a true loan, with an amortization schedule for repayment, and with the appropriate legal paperwork in case something would happen to you before we are repaid.  Without proper paperwork, we can't proceed.  I thought I was very clear about the status of the loan when we were talking about it before.  I'm sorry if this throws a wrench in things for you."

One other thing that I've heard people suggest (if it makes it easier when you're talking to her) is to put the blame on the fictional professional adviser.  "My accountant has advised me to always get everything clearly documented.  So no, I can't proceed with the loan unless the loan and repayment plan is in writing."

cicero

  • Super Hero!
  • ****
  • Posts: 17495
Re: The loan request.
« Reply #26 on: June 05, 2014, 12:46:07 AM »

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.
<snip>


"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."

I think your wording is fine.

her response to you is exactly what small claims courts cases are based on. Whatever signed document you have (in this case - the one indicating that this is a gift) will supersede whatever verbal agreement you have.


            Created by MyFitnessPal.com - Free Weight Loss Tools

Lindee

  • Member
  • **
  • Posts: 376
Re: The loan request.
« Reply #27 on: June 05, 2014, 12:51:59 AM »
I couldn't help noticing that you hadn't actually agreed definitely to the loan, but had left the offer open and you were still discussing whether it would even be needed and then it skipped a step and became send the money right now and take part in legal shenanigans.  I'm with everyone else, No "loan".

cass2591

  • Global Moderator
  • *****
  • Posts: 3342
Re: The loan request.
« Reply #28 on: June 05, 2014, 01:34:37 AM »
Locked for the obvious reason. Good luck.
There is no pie in Nighthawks, which is why it's such a desolate image. ~ Happy Stomach

I am an old man and have known a great many troubles, but most of them never happened. ~ Mark Twain

Adopting a pet won't change the world, but it will change the world for that pet.