Is it common practice for a borrower to deposit a large cash amount in the lenders bank account for up to 30 days to "verify assets" while the loan is being processed?

Run, don't walk away!

No it does not, there is no reason for this.Based on the information above you shouldnt be asked for anything abnormal like this. If you would like to discuss this further in detail, give me a call and we can discuss the situation in depth.

This sounds extremely "fishy" to me. That is typically not how a lender would verify someone's assets.

There are lenders who use this type of condition. Its called compensating balance, basically you are depositing money into their bank, to intice them into approving your loan. It is not very common. Is the lender, a depository institution such as a bank like Bank of America, and you are to deposit into this same bank? If you dont feel comfortable, you can change your lender anytime you wish. Feel free to follow up if needed.

HiI assume your loan will be sold on the 2ndary market to Fannie and Freddie. I'm certain your loan was submitted thru an automated engine on information you disclosed at initial time of application. The engine assess your loan base on credit, collateral and capacity. In my experience I try to input the least information possible to run an approval and see what the automatic system comes up as with conditions...Usually on a primary home refi no cash out, assets can be omitted so I am not sure why they are conditioning for that in the latter stage of the mtg process??? If they sell to Fannie/Freddie, it's just automated system so they can actually re-run findings unlimited times not inputting any assets and still try to get an approval. I do it all day but you just have to verify with the lender/u/w like I do everytime to make sure there are no overlays from the lender that's all...Working at Freddie Mac as a junior underwriter, engine is based on inputted information for assessment.

Get it in writing, turn them in and RUN.

Chances are rates are better now than when you applied a month ago.Cancel your loan, report them to the appropriate agency, and get a referral to a reputable lender.

DO NOT DO BUSINESS WITH THIS LENDER!! There is no reason for them to ask you for money. Please call me and I'll be glad to give you a quote with a lowest payment guarantee. I will not ask you for even one dollar. I can be reached at 866-766-1918. Eddie Sexton

No, this does not sound reasonable or appropriate. Assets are verified by showing 60 days of an account of YOURS with the funds in it. Many direct lenders don't have the training for their loan originators necessary to know how to smoothly complete a mortgage transaction, they also in many cases don't have the continuing education requirements needed to structure a loan in today's difficult market.Jason DreierPresidentLucidia Group, Inc.