Mortgage question - Posted by Mike

Posted by blakey on January 18, 2004 at 14:28:46:

Here’s the scoop from an underwriter. I see this all the time, it’s standard practice for many brokers.

Borrower sign an affidavit of intent to occupy. Lender follows up after 30 days with an occupancy inspection. You’re not living there. Lender will contact broker and ask for the difference between the rate as NOO and OO at the time of closing (say it’s a 2 point spread), that’s if the loans ltv etc fits as a NOO. If not you have to refinance the loan and payoff the lender.

It’s a hellava price to pay, suck it up and pay the extra, or take the risk of feeling pain later.

Mortgage question - Posted by Mike

Posted by Mike on January 07, 2004 at 08:03:27:

What are the pitfalls if any to claiming an investment property as a primary residence.

Re: Mortgage question - Posted by John-VA

Posted by John-VA on January 07, 2004 at 12:10:53:

If you mean other than committing bank fraud…

Re: Mortgage question - Posted by Mike

Posted by Mike on January 07, 2004 at 13:59:47:

Well the reason I ask is because when I talk to Mortgage brokers it seems to be a regular practice.

Re: Mortgage question - Posted by livingsd

Posted by livingsd on January 12, 2004 at 21:10:52:

If your serious about your investing career then find a broker who can help you with financing without fraud. If your deal is not doable, then find out why and fix it.

Re: Mortgage question - Posted by Ed Moore

Posted by Ed Moore on January 07, 2004 at 19:48:30:

How many brokers have you talked to because I can tell you that, without exception, no broker I know recommends or condones the practice, tacitly or otherwise? There’s too much at stake for all concerned. Yes, I’ve seen brokers do any number of things to get a deal through, but the owner/occupancy declaration for investors is a HUGE no-no. Think about it. It’s not like changing a date on a doc to put the file into compliance. When you lie about owner/occ, you’re messing with the bank’s money. I don’t have to tell you they do not take that lightly. And it is way too easy for a bank to verify.

The punishment is swift and final. We’re talking about potentially, the immediate recall of the mortgage, and fraud charges brought against the borrower and the broker(if duplicity can be proven).

Then if you’re convicted, you may never EVER be able to get an institutional loan again. The risk so far outweighs the savings it’s ridiculous. Don’t do it. We just had Wells Fargo do a check on a property for a mortgage that was NEVER late. I know a guy in fraud detection at Countrywide and they’ll do the same kind of check from time to time.