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Old 12-09-2011, 01:10 PM
 
6 posts, read 11,115 times
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We refinanced on our primary residence of 7 years in late summer (3 months ago) to move from an ARM to a fixed. This fall, my wife can no longer work due to a medical condition and we need to move but can't sell our home. I would like to rent our home but am concerned about the implications of "Intent to Occupy". We don't plan to purchase a new home but to rent in a different city closer to family. Am I at risk of being accused of fraud?
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Old 12-09-2011, 01:18 PM
 
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Quote:
Originally Posted by Naper1077 View Post
We refinanced on our primary residence of 7 years in late summer (3 months ago) to move from an ARM to a fixed. This fall, my wife can no longer work due to a medical condition and we need to move but can't sell our home. I would like to rent our home but am concerned about the implications of "Intent to Occupy". We don't plan to purchase a new home but to rent in a different city closer to family. Am I at risk of being accused of fraud?
Why would you post this question on a forum like this?
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Old 12-09-2011, 01:25 PM
 
6 posts, read 11,115 times
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I've seen similar posts in other City Data forums. I'll remove it if this isn't the appropriate place for it? Just looking to do the right thing in a tricky situation.
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Old 12-09-2011, 01:50 PM
 
10,302 posts, read 12,440,161 times
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Quote:
Originally Posted by Naper1077 View Post
I've seen similar posts in other City Data forums. I'll remove it if this isn't the appropriate place for it? Just looking to do the right thing in a tricky situation.
Sorry, wasn't trying to be too harsh. Just seems like a legal question.
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Old 12-09-2011, 02:13 PM
 
438 posts, read 1,465,843 times
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Maybe try posting your question in the Real Estate forum?
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Old 12-09-2011, 02:17 PM
 
6 posts, read 11,115 times
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Thanks for pointing me to the right forum. New user, didn't know the difference.
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Old 12-09-2011, 02:17 PM
 
Location: Oak Park, IL
5,520 posts, read 11,991,839 times
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I'm not a lawyer, but my educated guess is that at the time you applied for the refinance, you had an intent to occupy. I don't believe they can hold you to that indefinitely as no one can predict the future.
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Old 12-09-2011, 02:24 PM
 
28,393 posts, read 68,122,509 times
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The real estate or mortgage forums might be more apprpriate but basically I can tell you that while you would likely be in technical violation of the terms of the loan the odds of any regular lender coming down hard on your are slim.

Even, worst case, they did "call your loan" you would be forced to re-finance at the considerably higher non-owner occupied rate...

How close to the appraised value from the refi did you list at? Can you afford to cut your price? I would rather not rent out a home given currrent conditions...
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Old 12-09-2011, 02:29 PM
 
6 posts, read 11,115 times
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Thanks. Would there be any circumstance in which, if I were up front about this to the bank (I'd like to do everything above board) that they would waive their right to call the loan and let me continue with the current terms? As in, is there a way to show that my intent changed (it did, I'm not trying to be shady) and that I didn't violate the terms?
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Old 12-09-2011, 04:05 PM
 
28,393 posts, read 68,122,509 times
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Default Lots of assumptions...

Most lenders do not hold the loan in their portfolio, they sell it. The terms of those sales are such that should the 'servicer' (bank that collects the monthly payment and then forwards that on to the group that owns the loan, after taking their cut...) become aware of a "material change" in the loan it is their duty to follow through on the stated remedy.

That is fancy way of saying "keep quiet about this"...

Even if the lender had the loan its portfolio the odds of the them agreeing to refinance this as non-owner occupied are slim. There is NO upside for them. The risk of non-owner occupied default is about 70x -- 300x times greater...

Odds arre strongly in favor of them sort of following a "don't ask / don't tell policy" -- stay current and they are better off not knowing... NOW if you do get behind and THEN try to short sell and they see that you have bought another home someplace else don't expect any debt to be forgiven. Illinois is a recourse state and more and more suits are being filed to recover loses.

ALSO you need to be VERY CAREFUL about your home owner's insurance --most policies have strict wording about property remaining OWNER OCCUPIED and should any tenant cause major damage the insururer would be within their rights to deny claim...

If you can afford to sell just cut price and get it over with...



Quote:
Originally Posted by Naper1077 View Post
Thanks. Would there be any circumstance in which, if I were up front about this to the bank (I'd like to do everything above board) that they would waive their right to call the loan and let me continue with the current terms? As in, is there a way to show that my intent changed (it did, I'm not trying to be shady) and that I didn't violate the terms?
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