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Whether a loan app expressing intent to dip into an IRA to pay the
Listmates,
The procedural posture of this question is unusual. Client has no plans to
file BK. Rather, she is buying a condo and asked whether it is "OK" to sign
a letter requested by the mortgage broker.
The client is semi-retired, has limited income ($2K/mo) and a large IRA
($1M). To compensate for her low income, she was told that she needs to say
that she intends to dip into the IRA at the rate of $6.5K/mo. The broker
asked her to write a letter expressing this intention. Also the loan
application shows IRA withdrawal of $6.5K/mo as income.
(1) Would such statements (A) in the loan application and (B) in the letter
jeopardize the IRA exemption in the event this client needs to file BK?
(2) This is a California purchase-money 1st mortgage, so the lender would
not be entitled to a deficiency after a foreclosure. However, in a
jurisdiction that allows a deficiency judgment post-foreclosure, would the
IRA exemption be compromised as a result of the above statements re: intent
to dip into the IRA to pay the mortgage?
Alik Segal
Alik.Segal@gmail.com
310-362-6157
Cal. CD, Los Angeles
Listmates,The procedural posture of this question is unusual. Client has no plans to file BK. Rather, she is buying a condo and asked whether it is "OK" to sign a letter requested by the mortgage broker.
The client is semi-retired, has limited income ($2K/mo) and a large IRA ($1M). To compensate for her low income, she was told that she needs to say that she intends to dip into the IRA at the rate of $6.5K/mo. The broker asked her to write a letter expressing this intention. Also the loan application shows IRA withdrawal of $6.5K/mo as income.
(1) Would such statements (A)inthe loan application and (B) in the letter jeopardize the IRA exemption in the event this client needs to file BK?(2) This is a California purchase-money 1st mortgage, so the lender would not be entitled to a deficiency after a foreclosure. However, in a jurisdiction that allows a deficiency judgment post-foreclosure, would the IRA exemption be compromised as a result of the above statements re: intent to dip into the IRA to pay the mortgage?
-- Alik SegalAlik.Segal@gmail.com310-362-6157Cal. CD, Los Angeles
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