Legal Question in Real Estate Law in Wisconsin

Mortgage Lender Prying Into Source of Funding and Private Life of Borrowers

Yes, since lenders are private companies, they are not required to lend money to anyone, (subject to discrimination laws against racial discrimination, etc.). Therefore, they can put whatever preconditions they wish upon any loan application. Your only remedy if you do not like their questions is to find a different lender. However, the next lender may well ask the same questions, since many lenders' organizations and trade associations set up uniform policies in order to create loans which can be resold in the secondary market as consistently structured products subject to uniform lending standards. Smaller banks which retain loans in house or private party lenders may have looser loan policies. The source of down payment funds is important, since they provide insight into a debtor's ability to save as well as the stability of his income. Illegally obtained funds, for example, would not reflect well upon a debtor's ability to consistently make future payments. My comments here are not intended as legal advice unless you subsequently retain me and revisit this issue with me.