Consumer complaint received 2018-03-15
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: GERSHMAN INVESTMENT CORPORATION (MO)

Dates : XX/XX/XXXX - XX/XX/XXXX I was informed by the lender that my debt to income ratio was too high to qualify for a mortgage. I advised the lender that I was able to pay some things off that would bring my debt ratio down to their required level. 

In order to bring my debt ratio down the lender required me to payoff a vehicle loan. I sold the vehicle and provided the lender with proof of the sale and proof that I had paid the loan in full. 

According to XXXX XXXX : XXXX : Sale of Personal Assets Proceeds from the sale of personal assets are an acceptable source of funds for the down payment, closing costs, and reserves provided the individual purchasing the asset is not a party to the property sale transaction or the mortgage financing transaction. 

Documentation Requirements The lender must document the following : 1 ) The borrowers ownership of the asset.

2 ) The value of the asset, as determined by an independent and reputable source.

3 ) The transfer of ownership of the asset, as documented by either a bill of sale or a statement from the purchaser.

4 ) The borrowers receipt of the sale proceeds from documents such as deposit slips, bank statements, or copies of the purchasers canceled check. 

https : XXXX I provided the lender with the four forms of documentation required by XXXX XXXX . The purchaser of my vehicle was not a party to the property sale transaction or the mortgage financing transaction. After providing the four required forms the lender continued to ask for more documentation that I could not provide such as a copy of the vehicle title, proof of where the purchaser 's funds came from and copies of the the purchaser 's loan documents. It is not legal for the lender to ask for any of these things from a party not involved in the mortgage transaction. The lender stated their requests were XXXX XXXX   regulations. 


The lender also violated rules relating to rental income. 

According to XXXX XXXX XXXX : Rental Income : Partial or No Rental History on Tax Returns In order for the lender to determine qualifying rental income, the lender must determine whether or not the rental property was in service for the entire tax year or only a portion of the year. In some situations, the lenders analysis may determine that using alternative rental income calculations or using lease agreements to calculate income are more appropriate methods for calculating the qualifying income from rental properties. This policy may be applied to refinances of a subject rental property or to other rental properties owned by the borrower.

If the borrower is able to document ( per the table below ) that the rental property was not in service the previous tax year, or was in service for only a portion of the previous tax year, the lender may determine qualifying rental income by using 1 ) Schedule E income and expenses, and annualizing the income ( or loss ) calculation ; or 2 ) fully executed lease agreement ( s ) to determine the gross rental income to be used in the net rental income ( or loss ) calculation. 

https : XXXX Since my rental property has not been in service for an entire tax year the lender is required to accept a fully executed lease agreement as a substitute to a schedule E. I provided the fully executed lease agreement to the lender. In addition to the lease the lender told me I had to provide proof of rental income being deposited into my bank account, and if the full amount of rent wasn't deposited I had to provide the lender with a letter stating what I had used the money for that wasn't deposited.