Thread: In California - Someone checking if owner occupied?

I have never heard of face to face checkups but your friend will be required to sign a document stating that they are not going to rent it out and they will be living in the house.

If your friend does not live in the house and rents it out they will be committing loan fraud which, in certain situations, can be a federal offense.

Yes, these sick people keep harrasing you unless they come across the owner.

The chances of someone physically checking on the occupant is slim. VA used to do it quite a bit but I don't know if they still do.
Like Greg said it is mortgage fraud if you do get caught. Getting caught is not that hard with the use of computers.
Play the game fairly and the program that is set up for specially for people who want to become homeowners will continue.
Don

what if someone buys a condo and then rents out a room or so, and uses the rest of the property for himself/herself. Can that be considered owner occupied?

It must be owner occupied the majority of the year. All federal and state tax forms includes these issues for deducting mortgage expense. It doesn't technically have to be owner occupied. You can have it vacant, or you can allow anyone you like to live there for free, but you cannot rent or lease it out, unless you live there also concurrently.
Govern you actions by the question: if everyone else did the same thing I was doing, would it cause a problem? Investment properties are a higher risk for the lender, they need to charge more and/or require a higher equity to make it work for them. If it didn't hurt the lender, your friend could ask for a waiver written into the loan that this special owner-occupied loan will be used as non-owner-occupied investment property. Then what would be the point of having two different loan programs? See why its not fair?

is that a basically boils down to a matter of integrity.

Remember in school when the one person that didn't admit they were the culprit and the whole class got in trouble?

I don't think anyone means to come down on you too hard, but the rest of us don't want to get put into real-estate investment detention because of your friend.

I think the best solution is to your situation is what Psychoknight suggested... ask them to put a waiver clause into the loan, so your friend won't have to worry about someone coming to her door or not.

Keep it clean and simple and no one gets hurt!

If your friend does not live in the house and rents it out they will be committing loan fraud which, in certain situations, can be a federal offense.

Originally Posted by calgal

Hi forum! a friend of mine is buying a house, and she told me that she was told that it's real strict now about people owner-occupying the house. that she should be prepared for a visit from someone (the Feds?) to see if in fact she is living in the house. I guess she is putting only 3% down and they want 20% if it's investment property.

Do people ACTUALLY come to your door sometime in the first few months to check if its owner occupied? Can they ask to come in? what if the owner is not home but someone else is? will they take their word for it? Do they just keep coming back till the owner is home and answers the door? Don't they have better stuff to do than this? LOL

neither of us had heard of this, and i'm an internet freak, so I said i'd get on a forum and check it out. Thanks!

Lenders DO send people to check and it is fraud to claim you are an owner occupant when you are not.

She should live there for a year to be safe...not want you want to hear, but a fact!