Sometimes Collecting Clouds Good Judgement - A True Story

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Nuvolari
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Sometimes Collecting Clouds Good Judgement - A True Story

Post by Nuvolari » September 7th 2021, 10:13pm

I just had a client who, after six months of “working on” his credit, hadn’t paid off or down jack shit.

Six months! He’s buying a house that’s just about complete and his credit score is not sufficient to get the subordinate financing he needs to close….

“Okay, the first mortgage is approved”, I tell him, “so just follow these easy steps so that later, when we order an updated credit report, you should be lookin’ good!

We’ll need to get both of your scores above 680 in order to qualify for the second mortgage you need in order to buy this home unless you can make a larger down payment.

“Um, okay.”

Cut to - one fine recent day no we’re now ready to send out the approval package to the investor on the second lien. I’ve got the appraisal, our loan approval, their income docs… Okay, all I need is that updated credit report, clickity click click… new report!

I’m soooory… what the actual fuck am I looking at!!? One card has a $15k limit and the balance has gone up to $14,000! Your gawddamn representative score actually dropped - it’s now showing 668!? Your wife shows 672.

Okay, look, you’ve GOT to pay down these various accounts to these specific dollar amounts.

No, no - you’re absolutely right, that IS about $15,000 worth of crap you need to pay! Look - I don’t know what to tell you, man. I don’t make the credit score rules - though, as you may recall, I did warn you very early on about how it was important to actually limit your credit use until your mortgage has been successfully closed.

“But… I mean… I really thought it would have gone higher than that!

I’ve already taken a loan against my retirement for the house… But, now all of a sudden you’re telling me I’ve got to pay all this stuff! That’s $15,000 I had not planned to pay…”


Understood. It is what it is, man - this is where we are now. Let me ask you a very simple question: do you still want to move forward with the new home purchase?

“Yes. We both really love it and we’ll do whatever we need to do. Sooo… ‘now what’?”

Well, you’ve got to improve your scores - but if you are paying down other debt with your down payment money, that $15,000 ‘hole’ will need to be plugged.

Conceptually, the solution is pretty straight-forward: You need to find additional assets which can documented, liquidated, and for which you can provide a paper trail for the sale.

It’s really as simple as that.

“What if my buddy gave me some cash to…”

Nope. Again, you can NOT just have a bunch of cash simply show up - we can’t verify source or ownership of cash… So - listen to me, this is important - this must be absolutely ‘by the book’ - and the book says you gotta give us a paper trail. Got it?

How else can I prove the money is not from a loan shark, cocaine sales, pimpin’ - whatever -…. Because money that is not from nefarious sources should be easy to document and provide a paper trail. You feel me?

“Yeeeeeah…”

Okay. Talk to me, man - we’re down to the wire, now - sooo? You say you want the house - but we now have a $15,000 hole to fill. Would you be able to obtain a ‘gift’ from a blood-relative?

I mean, we don’t do DNA tests, wink wink…. but, on the gift letter the donor will need to at least say they are a relative of some form (brother, uncle, daddy - can all be the same guy, no body cares!) BUT they’ll need to document the source of those funds with an account statement.

“Nah… we don’t really know anybody who’d be willing to do that…”

Well. Alright then… Uh, okaaaay… tell me about where your respective offices are located? Could the two of you - for just a month - get away with one car until we can close your home purch…”

“No - no, I’d rather not sell either of our cars…”

For fuc… We’re basically running out of options here. Do you own any individual stocks outside of your 401k? Do you own any artwork? Or jewelry?

Because, the only way to fix this requires that we document the existence of some marketable asset which you could liquidate - with a bill of sale and turn into money.

“{Sigh} I guess I’ll probably have to sell one of my Rolexes…”

Uuuh, yah! Are you kidding me? Absolutely! First of all, as a watch guy, I ‘get it’ - but, come ON, man! This is an asset of value that you can liquidate fairly easily.

“I have the box, papers, hang tags, everything. I just didn’t want to sell it in a rush…”

Well, my friend, we live in an imperfect world - and in the meantime, a watch with provenance is a helluva lot easier to sell than art! And, let’s not forget, you can always get another Rolex later on…

“I do have another one, actually…”

Yeah, okay, then you need to just get to it - once I get your scores over 680 you’re going to need to sell it, quickly. You simply don’t have 6 months to dangle it on ‘Watchrecon’.

“Okay.”

Finally, today my processor received a watch appraisal, a bill of sale, and a copy of the check received for about $20k from the Jeweler which has now been deposited.

And, it seems, this stubborn enthusiast will be able stay married by moving forward with their new home purchase.

However, sometimes it feels like my patience is extracted from all the way down deep, deep in my bones.

This was one of those times.
Oversteer scares passengers, understeer scares drivers...
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