ronnyk

This is simply-- and unequivocally-- false. Plus, I would not use a slash ("/") because it is both fraud (a) as a crime (in the sense that you are knowingly misrepresenting an intention to repay the loan as an inducement to obtain the loan proceeds); and (b) under the Bankruptcy Code, an exception to discharge.

As a former bankruptcy attorney who represented debtors, I have attended my share of hearings where debt-run-up activity was explored in depth for the very purpose of establishing an exception to discharge. There are forensic accountants whose specialty is to trace money from it source, and I doubt any of the "diversification" techniques employed by MSers would pose any hurdles.

As an aside, and as someone who has bought a fair number of homes in my time, a substantial hurdle (and one I always found annoying) is establishing the source of monies being used towards the purchase. I suppose one could choose to not disclose the account into which all of those MOs are being deposited, but at the end of the day, if you intend to show up at closing with $100K in cash there are going to be questions asked. I think generally the idea is to make sure that money is not an undocumented loan which would throw off the calculations as to appropriate debt burden, but a large amount of undocumented cash is also likely to raise questions about your declared income, and ultimately your credit-worthiness.