How can I find out if Loan Agent screwed up?

Question

Friend of mine just tried to purchase a home. Credit is ok, but stable income is an issue. However, the real estate company (which acts as lending broker and realtor) have given him positive assurances for several weeks. It's been nearly a month and he keeps being told all is fine. He was told three weeks ago to give notice at his apartment as of the 1st. Twice last week he was told he'd get the final dox and keys in the coming days. Today, (31st) he was told the bank rejected the loan because of the shaky income. Seems to me this means either the broker sat on the paperwork for a couple weeks before submitting it, or the bank rejected it a couple weeks back and the lender's been looking for alternatives. Long story short, tomorrow's the 1st and he and his roommate have to be out of the apartment...they can't extend it. Broker says he's looking for other lenders (at a now higher rate). Is it likely the bank took a month to decide income was an issue?

One other note: Part of the "plan" with this loan agent was that they deposited money in my friend's bank account so that when the lender looked at savings accounts, they would see the required assets. I know when I bought my home they told me I had to have the money in my account for a certain length of time to show that it wasn't a gift, loan from a friend, etc. Is it legal for a real estate company/lending broker to use their funds to demonstrate the required monies are in the buyers account?

Answer 1

Your friend needs an attorney. And a call to both the state banking regulator and real estate licensing board would be in order as well. Your friend was complicit in the mortgage fraud by allowing the deposit to his account but coming clean quickly may help to minimize his legal exposure. (Personally I'd empty the account as well, but that's just me.)

Answer 2

The loan company did not only screw up, but engaged in lender fraud. Any loan brokerage which deposits such finds in a client's account to deceive the underwriter should be reported to the Attorney General of whatever state in which this occurred.