One major short sale concern of the bank is investing the time and effort in arranging a short sale then having the buyer not close on the short sale. Due to this possibility you can expect the bank to ask for a “Proof of Funds Letter” or a “Mortgage Commitment Letter” as a needed part of the short sale package.

This request is often a major hindrance for investors that are flipping the deal with what is regarded as a double closing or simultaneous closing. What are yourr options?

Here are a few possible (remedies|solutions} for the needed proof of funds letter:

-Bank Statement. If you have the funds available send the bank a recent bank statement as your “proof of funds letter”.

-Obtain a Proof of Funds Letter. This letter can be acquired from your bank, mortgage broker, non-public hard funds provider, or anyone which has the power to provide transaction funding.

-Mortgage Commitment Letter. I am not a fan of the Mortgage Commitment Letter because a bank issues a loan commitment after it has approved both the house and you. The home appraisal must meet the bank’s rules and the bank may need the real estate be in a better condition then the current state of the property. For that I feel a commitment letter is better suited for purchasing houses that don’t involve a short sale.

-Home Equity line ( HELOC ). If you have available equity in a property a HELOC on the home can serve you well. First, there is no charges on most HELOC for unused lines of credit. Second, it meets the banks suggestions for proof of funds letter even if these are not the funds you intend on closing with.

The bottom line is unless you have a longtime relationship with the bank it’s likely you will have to show evidence of funds in some manner. If you are new with some resources, find a good hard funds provider to work with and they can supply the proof of funds letter you need.

A proof of funds letter can be referred to by many names in addition to the standard meaning of a letter that states you have funds available to complete a transaction. A proof of funds letter is often used in real estate short sale and REO purchases to provide explanation that an investor or buyer has the power to purchase the property they are making an offer on.

Understandably, the currently overworked loss mitigation or short sale negotiators wish to be certain that they are working with a buyer that may perform. They need to know the purchaser has the assets if an agreement can be negotiated on the estate property.

A “leased proof of funds letter” appertains to monies being deposited into a clients private or business account by a backer for a fixed fee. The bank “blocks” the money so that it is not permitted to be withdrawn by the customer ; however the money is in the account to show proof of funds. Extra terms used for this type of exchange are “standby letter of credit” and “blocked funds letter”.

The WSJ said that the U.S. Solicitor’s office claimed “persons who were looking to temporarily lease funds in order to enhance their creditworthiness when applying for loans were instead provided with false proof-of-funds letters on bank stationary showing the funds had been deposited in their accounts.”

Needless to say, it is critical to grasp the difference in the sort of proof of funds letter obtained. If you can access private funds, HELOC loans or funds that can be borrowed from buddies or family, then providing bank records would supply the required “proof of funds letter” paperwork.

If curious about legit “transaction funding” or “acquisition funding” for short sales or REO flips, a normal “proof of funds letter” can be obtained. Look for a lender or financier that is providing transaction funds for the total amount of the acquisition cost without regard for your money or credit situation. Typically a transaction funding fee is between 2-5% of the total of funds used to flip the property at a “double” or “simultaneous” close. This fee is taken from profits at the closing.

If you have an interest in purchasing Real Estate Owned or short sale properties, then you want to understand the fundamentals of transactional funding and proof of funds letters and how they relate to your property interests and activities. Basically, the transactional funding refers to the funds borrowed for a very short period to transfer a property from the present owner, to the transaction coordinator, then to the new owner. Proof of funds letters are used to help secure financing and clear the way for the estate transactions you are involved in.

The use of transactional funding allows the short sale process to happen smoothly. The basic grounds for the loan is that once the first owner is prepared to sell and the buyer is prepared to take over the property (usually with the standard mortgage ), there’s a short term loan wanted to help the transfer period. This suggests the transactional funding is a loan that exists for some hours, then was recovered when the final property owner pays for the property.

Transactional funding works not just for the short sale eventuality listed above.

When buying property, the buyer must provide some kind of evidence that they have the funds to cover the property acquisition – this is where a proof of funds letter becomes helpful. This document that the investor can use to indicate to the parties involved in a real estate exchange that you have pre-qualified to purchase the genuine estate.

This kind of document is particularly useful if you are involved in short sale transactions and REO purchases that are structured with a double closing or when using transactional funding. They can also be used for other transactions that require documented evidence of your financial resources.

Using this letter, the buyer/investor is able to secure any required extra funding or to reassure the vendor that they have the means to fund the estate purchase.

After you know how these financial opportunities can be employed to the best advantage, you will be on track to achieving economic security thru real estate investment.

Morgan Foreman is a recommended author in the field of foreclosures and short sales. He will show you how to obtain guaranteed transaction funding with no cash or credit needed. Do you need a proof of funds letter? Learn about Proof Of Funds and visit www.WeProvideTheFunds.com

Proof of Funds, Investment Services July 16, 2009——Standing behind their product and services, Hartwell Ventures, nationwide funder has promised to pay for fees associated with satisfying the condition of Proof of Funds for commercial and residential real estate, project funding, leased funding, and transactional funding, for clients if it is found that their competitors are actually using legal and legitimate funds. 

David Page, manager of Hartwell Ventures states, “We are more than confident that we are the ONLY company that actually have true liquid assets over $5 million. Other companies may claim to offer the same product/service but we have discovered through our experience in the business that in fact their documents are undeniably fraudulent and have an array of legal ramifications.  We take pride in what we do and the services that we provide that we challenge other companies to do the same in conducting business legally.”

Hartwell Ventures is an independently managed investment trust that has been providing transactional funding / proof of funds since 2001 making them the longest standing provider. They have consistently closed over 30 transactions per month since March 2005 making them currently the largest direct proof of funds provider.

Their funds derive from an independently managed investment trust with $110 million under management that is used specifically for transactional funding and proof of funds transactions. As a direct source, they place the funds within 36 hours or less and in most cases within a few hours.

They provide cash on deposit in either an escrow account or directly with the bank depending on the needs of your transaction. Their Trust is fully liquid making them the only proof of funds provider with over $5 million in real liquid funds to invest for your transactions.

They primarily provide and have experience in providing proof of funds for Double Closings, Down Payment Requirements, Earnest Money Deposits, and Verification of Deposits for the following uses:

Commercial and Residential Real Estate 

-Bulk REO

-Flipping Foreclosures

-Short Sale Funding for Short Sale Flipping

-Down Payment Funds

-Double Closings

Project Funding

Construction & Development Loans

Film Finance

Warehouse Lines

Lines of Credit

SBA Loans

Private Placement Programs

Precious Metals

Hartwell Ventures Investment Trust focus: Proof of Funds, Proof of Funds Letter, Seasoned Funds, Leased Funds, Leased Assets, Transactional Funding.

Hartwell Ventures, is located at 3960 Howard Hughes Pkwy Suite 500 Las Vegas, NV 89169. Website is http://www.hartwellventures.com, and can be reached at 888-465-2401 or 702-562-4237.

If you are interested in purchasing Real Estate Owned (REO) or short sale properties, then you need to understand the basics of transactional funding and proof of funds letters and how they relate to your real estate interests and activities.? Essentially, the transactional funding refers to the funds borrowed for a very short period to transfer a property from the current owner, to the transaction coordinator, then to the new owner.? Proof of funds letters are used to help secure financing and smooth the way for the real estate transactions you are involved in.

Transactional Funding

The use of transactional funding allows the short sale process to take place smoothly.? The basic premise for the loan is that once the original owner is ready to sell and the buyer is ready to take over the property (usually with a standard mortgage), there is a short term loan needed to faciliatate the transfer period.? This means that the transactional funding is a loan that exists for just a few hours, before being recovered when the final property owner pays for the property.

The two separate transactions that place on the day of settlement create a unique situation known as a double closing. Lenders like these loans as the lending period is typically just several hours.? If the transactional funding lender ensures that all the other financing for the transfer of the property is in place, this makes this short term loan delivers a relatively low risk opportunity for a profitable outcome from the provision of the short term loan.

Transactional funding works not only for the short sale scenario described above.? A savvy investor can structure the use of a short term loan to easily carry out purchases of real estate owned (REO) properties, or any other real estate transaction that is based around a double closing.

Proof of Funds Letters

When purchasing property, the buyer must provide some form of evidence that they have the funds to cover the property acquisition – this is where a proof of funds letter becomes useful. This document that the investor can use to indicate to the parties involved in a real estate transaction that you have pre-qualified to purchase the real estate.

The proof of funds letters are used to demonstrate that investors have the financial resources or means to fund a property transaction. They indicate to the other parties that your funds are legitimate and can be used for the purchase of the property. This type of document is particularly useful if you are involved in short sale transactions and REO purchases that are structured with a double closing or when using transactional funding.? They can also be used for other transactions that require documented evidence of your financial resources.

To achieve success in real estate investment, it pays to fully understand the different options available to you and how to use them to maximum advantage. Transactional funding and the use of proof of funds letters are two added ‘tools’ in your investment toolkit.? Once you understand how these financial opportunities can be used to the best advantage, you’ll be on track to achieving financial security through real estate investment.