Whether a loan app expressing intent to dip into an IRA to pay the
Posted: Tue Apr 19, 2011 10:25 pm
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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