REOs and Homebuyer Priority period

4 Replies

I have seen several bank owned listings in which there is a owner occupied priority period. How is a bank able to enforce this? Does anyone know if it is occupied by an adult child of the owner if that is acceptable?

No, the Buyer must be the owner occupant. And yes, there can be severe penalties for trying to play the system.

Originally posted by @Wayne Brooks :

No, the Buyer must be the owner occupant. And yes, there can be severe penalties for trying to play the system.

As Wayne said, yes. Severe penalties. Especially if the loan was Fannie/Freddie/HUD, or any other numerous GSE's (Sounds like it with that language in the agreement).That's defrauding the Federal Government and usually, also defrauding a state/federally regulated institution. Can you get away with it? Sure. People do all the time but for the guy that gets caught, fighting over spare blankets and pillows with your bunk mate in prison is not my idea of a fun time.

There are tons of court cases available at your fingertips to show the penalties for those innocently (Or not so innocently) thinking it wasn't any big deal to hide the true intent of occupancy at purchase.

Not trying to get away with anything. Just wondering if this is common. I understand with government loans, HUD properties, etc., but this is a bank owned prop. is this a common practice with bank REOs as well?

Very common, not all lenders do it. Wells Fargo, HUD and Fannie Mae just about always do.

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