Submitted by TurtleScientific t3_1245e5x in personalfinance
Got a credit alert saying a lender tried to run my credit, turned out to be the bank I have a mortgage out with for my secondary home.
They're asking for a current financial statement, 3 years of tax returns, and evidence of property insurance.
Do I have to provide this information? I have never missed a payment. In fact, I have almost always paid in excess. Why are they asking for this information and do I have to provide this?
Edit: I did NOT expect this many responses. Thank you to everyone who replied, I'm hoping I answered the majority of the questions, i'm still reading them but so many are coming in i'll bet I missed alot!
Current status update and summary.
We have never let our insurance lapse for this property. Proof of Insurance has already been submitted to Lender directly. I only contact lender through existing channels (email address or phone # I already had saved) so we're confident this isn't a scammer. The loan agent was aware this was a second/vacation home purchase during the entire process. The property is not a short or long term rental, it is not revenue generating. The lending bank is small, 12 branches across 2 states (CO and SD). Our lending branch is in South Dakota. We owe a relatively small amount on the loan (the original loan was under 80k). We have never applied for any assistance programs or debt relief. We have not committed any fraud (that I know of anyway) or any missrepresentation of financials.
I live in a different time zone, so I am going to give them a call here shortly once they're open and have a casual conversation with my original lending agent (not the individual who attempted to pull our credit). I do have automated call recording on my phone and both of us are in one-party consent states, but will follow up with an email if needed.
FINAL UPDATE: TLDR: It's a regular audit, we got hit by random selection
I sat down and fully reviewed our loan agreement, there is one statement where we agree to provide financials annually at lenders request. Failure to do so raises our interest rate by 5%(!!!!) for remainder of loan. No wording indicating credit reports/hard pulls. The wording is extemely jargoney(?) so I may be reading it wrong, but this was my take away. I also saw nothing regarding tax returns. Failure to provide this information also could be termed as going into default, making the remainder of the note due. So we'd like to avoid that.
I spoke to my original loan officer. He indicated they were audited, which he said happens all the time. During an audit they pull a selection of loans at random. The agent who pulled ours was NOT supposed to use a hard inquiry unless required by the specific auditor. He is reaching out to her directly and we will be contacted again if a hard hit is necessary. He said when he does the audits he usually avoids reaching out to bother clients and the soft inquiry is usually sufficient. The financial statement is entirely self reported, its a single page balance sheet lol. The proof of insurance for our home was never put on file, they have nothing so ours was missing that. He made a note in our file of our concerns regarding the credit report and the abrupt nature of this request (again, he was concerned too about the hard inquiry), and told me there is no deadline for the paperwork at all. He said he put the note in our file to tell the other branch that we are "working on it" and to contact us directly before attempting credit checks in the future. But essentially if we don't submit it the agent may contact us again, but unlikely to take any action.
Soooo...my bank isn't doing anything evil, they're just sloppy and bad with paperwork.