owner occupancy (insurance, mortgage broker, loan)

[raleighwood07]

I was wondering about owner occupancy homes. How do lenders find out if the home is actually occupied by owner or not?

Has there been any examples in the area where lenders have found this happening? If so , what exactly did they do to the owner?

[DanielChang]

I'm no lawyer, but I'm pretty sure that it's considered mortgage fraud if you say you're going to occupy the house and you don't. My mortgage paperwork says that I'm obligated to take occupancy within 12 months. The reason is that an owner can walk away from an investment property but less likely to walk away from the home where he's living.

[ms_info]

Originally Posted by jinxor

I'm no lawyer, but I'm pretty sure that it's considered mortgage fraud if you say you're going to occupy the house and you don't. My mortgage paperwork says that I'm obligated to take occupancy within 12 months. The reason is that an owner can walk away from an investment property but less likely to walk away from the home where he's living.

IMHO I would refer to the mortgage documentation as mentioned earlier by jinxor. The lender could possibly make you buy the loan back. Can't tell you for sure what will happen but good luck.

[ChipL]

Agreed, It is fraud. if the file goes through a quality control audit anytime post closing and the house is being occupied by someone other than the borrower they have full rights to make you pay the loan then.
They can find the information any number of ways, one being looking online and searching the phone records for the property, more extreme would be the calling or going to the residence to check occupancy if they suspected something.

[Wanna Leave Penciltucky]

Is this an FHA or VA loan. Circumstances happen and people move but do not sell their homes. I once rented my home for a while when I was in NC. I have a friend that has been living with his fiancee for the last 5 years at her place and his place is mostly empty. There is a legal obligation for you to live in your primary residence so that you will maintain it. I have never seen anyone be told they have to live in a home that the payments are current on. No one will inspect your premises if you pay your payments on time.

[TimtheGuy]

This might change your mind on "cheating" on the occupancy. I received this email today from the mortgage ledger:

TV Sports Newscaster Pleads Guilty to Fraud

Dave Mark Fox, a television sports anchor and host of “Talkin’ Sports,” pled guilty last week to mortgage fraud in an attempt to flip a home for profit, prompting his network to place the broadcaster on “administrative leave.”


Fox has been a sports anchor for KUTV in Utah since September of 1987.

Until recently, Fox could be found reporting on local and national sports weeknights at 5 and 10 p.m., along with hosting the hour-long “Talkin’ Sports” on Sunday evenings.

Television audiences will not be seeing Fox for some time, though.

Last week, the sports anchor pled guilty to a second-degree felony charge of communications fraud for illegally obtaining a lower mortgage rate with a false loan application in April 2006.

According to prosecutors, Fox falsely suggested that he planned to live in a home in order to obtain a residential loan, rather than a more costly investor loan that could take longer to approve.

Fox had no intentions of living in the Utah residence, prosecutors claimed, and instead planned to quickly re-sell the property as an investment.

On an identical charge, Mark Atkins agreed to the same plea deal as Fox for a related fraud on another property.

Prosecutors anticipate similar plea deals with two other defendants, who are subject to an ongoing investigation involving Fox and Atkins.

While prosecutors say that Fox is not considered a suspect in that case, he may be called upon as witness as part of his plea agreement.

Investigators believe that Fox may have unknowingly taken part in a much larger fraud ringe involving mortgage brokers, home appraisers, title insurance agents, investors and homeowners.

The suspected conspiracy is believed to have defrauded mortgage companies out of millions with artificially inflated home values as part of an elaborate home flipping scheme.

For the second-degree felony charge, Fox has been placed on 36 months of a plea in abeyance.

A plea in abeyance indicates that the case will be dismissed after three years if the defendant pays the requisite fees and doesn’t violate any further laws.

However, if Fox violates any of the clauses of the plea in abeyance, the 48-year-old father of four will face up to 15 years in prison.

KUTV News indicated that the newscaster has been placed on “administrative leave” while the station reviews the situation.