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This past fall my I qualified for a no-cost HARP refinance. During closing I was presented with a "Occupancy Ackwoledgement" section that had the language "I MUST OCCUPY THE PROPERTY WITHIN 60 DAYS OF THE CLOSING AND CONTINUE TO OCCUPY THE PROPERTY AS MY PRIMARY RESIDENCE FOR AT LEAST ONE YEAR."
Now my family is considering moving. We would like to put our house on this market this Spring/Summer. Are we legally bound to not close on a new primary residence until 1 year (Fall 2011) after we signed the refinance? Or is this really just in there to prevent a rental cloaked as a primary residence? Please help.
The document you signed is a legal agreement that allows the lender to sell the loan as "owner occupied". Owner occupied is big deal becuase in aggregate such loaned are far less risky than investor loans.
If the lender were to find out you are not compliance they COULD force repayment in full.
An obvious violation of the terms of the loan, such as attempting to claim another property OAS a primary residence could similarly trigger a forced repayment.
If there is no way to avoid this you would be wise to understand the details of what the lender could force upon you...
I guess I don't understand why I should be concerned about "repayment in full" as that would be the goal of selling the residence. No concerns with being underwater either (likely LTV is around .6).
I was surprised at time with the "1 year" restriction, debated going forward with the the refi. Worst case scenario, we look to put our house on the market late summer/early fall, but I will probably give our lender a call.
why are you refinancing when you're planning on selling within a few months? aren't there costs involved with this??
as noted by others they are concerned you're not going to occupy the property and are going to rent it.
I actually had a real hard time getting my bank to allow me to puchase my second house b/c my first didn't sell. not b/c of debt or income limits, but b/c they didnt' beleive I was going to occupy the new house. finally had to write a 2 page letter explaining why I wanted the new house.
It was a no cost refinance, and the numbers made it a no brainer. (500$ less per month)
I'll follow this up once I hear back from the lender. Hopefully this refi doesn't hold us "hostage" through the fall.
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