Would I be committing mortgage fraud?

Question

So If I purchase a home as my primary residence with all 100% honest intent to live in it. Mortgage laws say that I intent to inhabit the property as my primary residence. However, what if I have to relocate to another state 3-6 months after closing?

At that point, I have to choices, I can rent the property out or sell it. Both which would be violating the rule/law to live in it for a year.

Help?

Thanks in advance

Steven Warner · Answer

Just rent it- the lender only really cares that they are getting paid...

Daniel Hennek · Answer

As mentioned above, it is your intent at the time the contract is consummated that matters, however...

If it is your belief that a job transfer out of state in the very near future is more likely than not you're entering some grey territory right there.  Be 100% sure that you are operating in good faith and being honest about material facts.  If your lender asks you questions answer them honestly, and if you think something is relevant it is up to you to discuss the issue with your loan officer.  Not knowing if you're getting an internal transfer is different from you having another job offer from a different company that you fully intend on taking in 6 months.  When everything about a transaction is know by both sides you don't run into any issues.  When something is misrepresented by one party then you're talking about trouble.  Not misrepresenting anything is the best way to protect yourself

You've come up with an awfully specific "hypothetical" situation which makes me wonder how far along you are on these what ifs...

Mortgage fraud is a crime.  If you think you're doing something wrong I suggest asking the person your working with instead of an online forum where we don't have all the facts and context of the situation.

Allen Lopez · Answer

@Steven Warner

Thank you.

So do I have to notify the lender about it or can I just go ahead and move and rent the property?

Steven Warner · Answer

Allen:

The question to be asked is "what was your intent at the time of execution of your loan documents?", if you have the intent to "owner occupy" then you are ok.  It cannot be fraud when you actual intent is to occupy.

While other might argue otherwise, the fact that your move is dependent on your employment, health needs of your family, or something out of your control - you should be good to go!

Good luck!

Steve

Would I be committing mortgage fraud?

Most Popular Reply