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Old 11-15-2012, 07:48 AM
 
2 posts, read 3,022 times
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I have been living in a condo for almost five years. I was going to move out of state back in the summer time, but circumstances resulted in me changing my mind. Since I didn't know when or even if at that point I was going to move at all I decided to go ahead and refinance my mortgage using a federal a program because I'm in negative equity and could now get a lower interest rate. I went ahead and started the process back in September and closed on the new loan last week. Part of the contact I signed was that my unit would be owner occupied. Well, two weeks before the closing I was able to go through with the move I wanted to do last summer so I decided I'm going to move after all and found a tenant and everything to take my condo. I still went through with the closing of the new loan because if I hadn't with the old interest rate my payment would be higher than what I'm getting for rent. I'll still be living in the condo for the next three months as I'm not leaving until early next year. The form I signed stating that the unit will be owner occupied just says that I agree to take possession of the unit within 60 days. Well, I'm already here and will be here in 60 days as well, but will be gone in about 90 days. It doesn't say how long I have to continue living here.

I'm a little worried about it now because I'm afraid technically I may have done something illegal since I agreed to occupy the property when I signed the loan and now I'll be leaving three months after I closed on it, but like I said I have been living here for five years already so it's not like I went out and bought a place for investment, but lied about it. I'm really only going to get about $50 off this place anyway each month from the tenant after I pay the mortgage and stuff. I just want to hang on to it for another four or five years until the mortgage gets paid down enough that I can sell the place and at least break even. I would have just sold it now, but the ones currently selling are selling for less than what I owe on my mortgage.

Should I have just called off the closing? I'm worried that when I move out in a few months the lender might find out and it says in the document they could then consider the loan in default and foreclose on it. I'm not going to change my mailing address with them, so I don't think there is really any way they'd know if I'm here or not, but you never know. Am I worrying too much about this? It kept me awake last night thinking I've done something wrong. Appreciate any advice.
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Old 11-15-2012, 08:09 AM
 
Location: South Jersey
819 posts, read 2,704,787 times
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I work for a mortgage company and I can tell you that yes, this is wrong. Those programs are for owner-occupied properties only. If they find out, the can start foreclosure for fraud.
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Old 11-15-2012, 08:11 AM
 
Location: South Jersey
819 posts, read 2,704,787 times
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and how do you know your tenant wont' get sick of getting your mail? Also, you probably don't realize that most mortgage companies can run your credit any time they want, so if you move out of state, this could be shown on your credit report.
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Old 11-15-2012, 08:34 AM
 
Location: Austin
7,054 posts, read 16,741,899 times
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This is mortgage fraud. I don't think they can foreclosure since you're making your payments, but they could call the note due which means you have to pay the full amount owed. Probably won't happen though. As long as they're getting their payments, they typically just let things go like that as they have bigger fish to fry.

If you found out about the relocation right after signing the docs, that's completely different. You signed them with the intention of being an owner occupant and then your circumstances changed. Since you found out and still signed, that's why it's loan fraud.
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Old 11-15-2012, 08:47 AM
 
2 posts, read 3,022 times
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Quote:
Originally Posted by AdotAllen View Post
and how do you know your tenant wont' get sick of getting your mail? Also, you probably don't realize that most mortgage companies can run your credit any time they want, so if you move out of state, this could be shown on your credit report.
My mail will be forwarded so I'm not worried about the tenants getting bombarded with it.

As for the credit report, well, it is what it is I guess. Too late to do anything about it now. As long as the lender gets their money on time I don't see why it should be a huge issue. I didn't do this with any malintent.
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Old 11-15-2012, 10:46 AM
 
Location: Kansas City North
3,602 posts, read 6,677,996 times
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Quote:
Originally Posted by SwisherFan33 View Post
My mail will be forwarded
By the USPS? They'll only do it for a year. Plus mortgage co. may send mail with "address correction request" endorsement and get your new address from USPS. And, as mentioned above, a credit report can be pulled at any time.
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Old 11-15-2012, 03:07 PM
 
Location: South Jersey
819 posts, read 2,704,787 times
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Quote:
Originally Posted by SwisherFan33 View Post
My mail will be forwarded so I'm not worried about the tenants getting bombarded with it.

As for the credit report, well, it is what it is I guess. Too late to do anything about it now. As long as the lender gets their money on time I don't see why it should be a huge issue. I didn't do this with any malintent.
You signed a legal binding contract with the lender advising you would be living in the property. You plan on moving, that is fraud.
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Old 11-15-2012, 06:30 PM
 
4,465 posts, read 7,856,148 times
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Look the "owner occupied police" are not going to be knocking on your door to check in on you. Just forward your mail, and dont tell them your new address. Just keep getting the mail forwarded for the next year. Or, get a local private po box at UPS or similar right now, give that as your mailing address and get the mail forwarded to your new address indefinitely.

Dont worry about it.
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Old 11-16-2012, 06:06 AM
 
Location: MID ATLANTIC
7,557 posts, read 17,450,160 times
Reputation: 8020
Yes, you screwed up. Occupancy fraud is the #1 type of fraud committed, but it is also one of the hardest to prove. Everything revolving aound occupancy revolves around intent. So, if one month after closing, you are transferred or receive a new job out of town, it would not be a problem, because your intent when you signed your papers was to live in the property. Where you messed up, you knew it before you signed. You executed a lease, I am assuming, within days of the refi? The one thing in your favor, you aren't leaving for a few more months (60 days + 90), I doubt it will even come up on anyone's radar. So don't rush to call the lender or an attorney about what will happen in the future. You've waivered once on what you are going to do, this move could very well fall apart again.

Your problem right now, quite frankly, is you have posted on a public bulletin board about your fraud. Consult an attorney and lay out the situation to him/her and do not leave this message board out of the conversation (print it out). Chances are they will say when you move will be the time to deal with it and your lender, and by then, it probably won't even get a second look.

I wish others could learn by your mistake.
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Old 11-19-2012, 11:45 AM
 
936 posts, read 1,734,251 times
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A big issue is the insurance one. You'll need a different type of insurance for your rental property than what you had when it was owner occupied. When you change your insurance, your lender will be notified by the present carrier that the policy was cancelled.
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