I recently did an FHA loan for a customer.  Well because his scores were in the 500's we had to do the loan in his wife's name only.  He had been renting this house from his parents for about 6 years and now that he was married they wanted to buy the house.  His parents gave them a gift of equity of $15,000 and paid every single penny of closing costs to include all prepaids and his 1st year of insurance.  So they came to the table with absolutely nothing out of pocket.  Zero, zip, nada.  Pretty sweet deal huh?  Plus his PITI is less than his rent.  During the process we discussed the tax credit of $8,000 (puchase price was $85,000).  I did not know that they were not eligible because they were buying from a lineage relative.  Long story short, he is now wanting my bank to compensate him the $8,000 because he says the only reason he bought the house was to get the $8,000.  When asked if he did his due diligence in researching the tax credit he admitted that he had not.  Does anyone out there think that my bank should fork out $8,000 to this guy?

Wow, sorry to hear about your situation.  I always make sure I tell my client to consult with a tax professional before making any decisions.  I do not think you or your company are responsible for their situation.  You just made a bad decision by giving advise you thought was accurate, remember, you are the mortgage professional, not a tax professional, always make sure they understand the difference in the future.  Lesson learned.

PS  I think they would have bought the house anyway, don't you?  Just trying to get money from you and your company that they never really deserved.

Ha, what a joke, let him complain all he wants but I'm sure your bank isn't going to do anything, nor should they.  It was well known and stated right on the tax form that lineage relatives were exempt from receiving it.  As Jan said, it's a tax related question, not mortgage related.  Sure it involves a new mortgage, but the lenders are not the ones issuing the credit.  Plus he got a great deal.  I would put this one behind you and forget it. 

Have you guys taken the National Test yet?  There are questions that address this particular issue within the one I took....and in the practice test...

Not yet, what was the question?

It is my understanding that as a FDIC insured bank employee I will just have to register but not be licensed or take the test.  I have heard there are some tricky questions on it and probably wouldn't be a bad idea if everybody had to take it.

Bobby, you don't have to tell us what the specific question on the test was but if you have some insight into the question posted by Marianne than can you please share it instead of leaving open ended answers, thanks.