Posted by Karen McCall on November 07, 1998 at 16:33:50:
It used to be that you didn’t have to worry so much about that, but the the SUE SUE mentality everyone is looking to nark everyone else out. Usually what happens is:
Neighbor wants to buy house/duplex, can’t for some reason, you buy it claim to be an owner/occup. get a great deal then choose not to live in it after the owner tells the neighbor that the reason you got such a great deal is that you plan to live there,you close on the property, and don’t move in, neighbor calls lender, lender gives neighbor the HUD inspection hotline # neighbor calls and WHAMO the inspector shows up with a summons to a HUD review and YOU’RE SCREWED, HUD has their own hearing they have their own board who decides the case and they want $250,000.00 which is mentioned when you sign that you are going to Owner Occupy, as well as they won’t allow you near a HUD, VA, Or mortgage with PMI for atleast a year and a half, they can do this for your lifetime, but first offenses usually only get the 1.5 years.
By the way the neighbor buys the house at the lenders auction at a good price and makes a bundle.
Just thought you ought to know the real deal----been there done that.
Posted by Jennifer(NH) on November 06, 1998 at 07:32:08:
Here’s the deal…and should I be worried?
2 years a go I bought a duplex owner occupied for me to live in using an FHA program. I lived in it for 1 1/2 years before moving in with my SO. I then rented it and had the bills sent to a PO Box in the same town. Also, I still claim that as my legal residence.
Anyway, the other night some FHA guy knocked on the door of the tenant that’s living there now. Apparently, he just announced that he was with the FHA and had been there earlier. She replied saying that she had no idea what he was talking about and she wasn’t there earlier when he claimed he was there. So with that the guy left. I asked her if he had specifically asked for me and she said no and that he only introduced himself as being with the FHA.
Kind of Weird…should I be worred that the FHA owner occupied police are out to find me.
Posted by Rob FL on November 07, 1998 at 09:25:21:
I have an FHA mtg on my home that I bought in 1992. Here is what the occupancy requirement says “Borrower shall occupy, establish, and use the property as borrower’s principal residence within 60 days after the exection of this security instrument and shall continue to occupy the property as borrower’s principal residence for at least 1 year after the date of occupancy, unless the secretary determines this requirement will cause undue hardsip for borrower, or unless extenuating circumstances exist which are beyond borrower’s control.”
I don’t know if the language has been changed for new mtgs, but the wording on this is clear. All they require is 1 year of occupancy after that you are free to move.
Re: Owner Occupied Police… - Posted by Bill Gatten
Posted by Bill Gatten on November 06, 1998 at 14:21:46:
Jennifer,
If you didn’t fib on you application, you are very safe. However, I might have your tenant be very cautious about who this guy really is if he reappears. I’ve dealt with FHA for many years (Realtor, lender, land trust facilitator, etc.), and haven’t seen them call on a property after the residency requirement has been fulfilled, unless there was a payment problem, or the loan parameters changed (They may very well do it… I just haven’t known of such a thing).
You don’t have a five year call on you note, or anything like do you?
Re: Owner Occupied Police… - Posted by phil fernandez
Posted by phil fernandez on November 06, 1998 at 09:58:34:
Jen,
I am in the process of bidding on a HUD repo. In order to beat the competition on this one I did not want to wait the two week period for investors so I made my bid as an owner occupant. I had to sign an owner occuppied form stating that I will live in the house for at least 12 months.
It is my understanding that HUD does indeed check to see if you are owner occupying the house.
The fact that you had a P.O. Box might have tipped them off that you might not have been living in the house. You may have to give them proof that originally you did live there and they should leave you alone.
Funny I had the same thing happen 6(?) months ago when I assumed a non assumable crackhouse.
Guy even took pictures…
I think you can rest assured that this is a perfunctory thing at best and not sweat it.
If they do come after you, post again and I will show you step by step how to derail them for the next 2 years or so while you make a decision as to refi or sell or whetever…
Why is an FHA person knocking on doors at night? Is this service above and beyond, or suspicious behavior by someone who is not whom he is purporting to be?
Re: Owner Occupied Police… - Posted by Darren (MA)
Posted by Darren (MA) on November 06, 1998 at 08:22:57:
Jennifer,
I wouldn’t worry about that at all. I also, bought a duplex one time with an FHA loan. I lived on one side and rented out the other. When I bought the house, I asked my mortgage broker this same question. I knew that there was a chance my job was going to relocate me to Germany within the next year or so, so I asked the broker that if that were to happen, would I need to refinance this house under a non-owner occupied mortgage. She assured me that I did not. People’s circumstances change every day. So long as when I bought the house, I sincerely planned on moving into it (which I did) and planned on that home being my primary residence. If things should change after that, that’s life, things happen. If I had never planned on living there and said I was going to, THAT would be fraud, and there could be some serious repercussions for committing this. But your circumstances were innocent.
When you bought your house it sounds like you sincerely believed you were going to be living there. And you did. You had no idea that you would meet your SO and that your circumstances would change. I wouldn’t give it another thought. If you’d feel better about it though, call the mortgage company as an anonymous caller and explain your situation. I’m sure they’ll put you at ease.
