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Is this considered fraud should the buyer quit his current job soon after closing escrow, and start a law school while having a part-time job? The buyer never lied on his employment history, income, tax, etc during the loan process. He has not yet turned in his resignation notice to his current employer. His savings and part-time job can pay for the mortgage + tax + living cost. If his lender finds out he quit, what is gonna happen? By the way he got loaned by a direct lender where his mortgage broker belongs and they will resell the loan to a different loaner after close of escrow. Thanks in advance for your inputs.
The lender will verify his employment. If the employer says the buyer is quitting, the lender will want to reunderwrite the loan based on the income of the part time job.
Yes, it would be considered fraud because he has to sign something that says he doesn't foresee any changes in his employment... BUT prove it! He hasn't given notice yet and he would deny it if asked. Once the loan is funded, the lender can't do anything about it unless/until he misses payments and gets foreclosed on. If he stays current on his payments, they're not going to care.
The lender will verify his employment. If the employer says the buyer is quitting, the lender will want to reunderwrite the loan based on the income of the part time job.
Well the employer wouldn't say such a thing. The lender will ask is so and so employed here and how much does he make. The employer will say yes he does and he makes x and that will be the end of discussion.
Well the employer wouldn't say such a thing. The lender will ask is so and so employed here and how much does he make. The employer will say yes he does and he makes x and that will be the end of discussion.
These days, though, who knows. When I got my loan last year, the lender used a written VOE (verification of employment), and one of the questions asked was the likelihood of continued employment.
It's a far cry from a few years ago, when the only verification of employment, was whether or not someone worked there. Some lenders were so lax about it that the verification was performed by the loan officer or broker.
These days, though, who knows. When I got my loan last year, the lender used a written VOE (verification of employment), and one of the questions asked was the likelihood of continued employment.
I'm in the middle of refinancing my house through SunTrust and the officer asked this question to my boss....I wouldn't doubt that it's standard throughout the industry.
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