Time required to be 'owner' - Posted by garth30

Posted by d.moren on March 05, 2000 at 19:27:47:


Time required to be ‘owner’ - Posted by garth30

Posted by garth30 on March 05, 2000 at 06:18:39:

I know someone who does flips, and he says he tells the bank he will be owner occupant to get favorable rates/down payment. He then puts lights, etc in his name for 1 night, then ‘returns’ to his former home and the new one becomes the flip. I would like to do this if its up and up? Do banks care? Please let me know if someone knows of a true requirement or regulation of time to call it your home before you can move on. Thanks!

Re: Time required to be ‘owner’ - Posted by MDonovan

Posted by MDonovan on March 05, 2000 at 14:24:53:

Its usually 1 year. The time will be stated in the mortgage.

Lenders do this because they feel more secure with an owner living in the property. The maintenance is usually kept up. The owner risks his “home” if he defaults. The taxes are usually less on a homestead. Most important is that everyone has enough income for a primary residence, but when times get tough, investment expenses are neglected before food and shelter.

The best way to look at this is put yourself in the banker’s shoes. How would you feel if someone did this to you? Remember, if you make RE your business you will often be the bank. What goes around comes around.

The branch manager of a national commercial bank that I have been doing business with for years suggested I do this. She said “What you do with your property once we lend is your business.” But she does not make the decision to lend, and she is not responsible for defaults. So, is it OK?

see http://www.creonline.com/wwwboard/messages/62406.html for the answer.

Re: Time required to be ‘owner’ - Posted by Bert G

Posted by Bert G on March 05, 2000 at 11:28:43:

Rather than a specific time, whats more imortant is “Intent”. If he’s doing this on a regular basis, it would be pretty easy to show that the intent is to not live in the house. Can you say “loan fraud?” I thought you could.

However, any strategy will work until you get caught. My realtor told me her landlord moves every six months doing something similar to what you described.


Re: Time required to be ‘owner’ - Posted by Joe Kaiser

Posted by Joe Kaiser on March 05, 2000 at 11:15:13:

Does this sound “up and up” to you?

I didn’t think so.