Pearl, Real Estate Pro in Los Angeles, CA

If a Buyer and his Agent say he is an owner occupant to the Lender and turns around and rents out this property, is this mortgage fraud by both?

Asked by Pearl, Los Angeles, CA Fri Feb 7, 2014

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Hello Pearl it is the buyer that states their occupancy not the lender. If they stated owner occupied then it should be that. If not yes the buyer has supplied misleading info to their lender.
0 votes Thank Flag Link Sat Feb 8, 2014
Sounds like you have answered your own question.....because someone does something, doesn't mean it is right! What makes you think this agent knew what the customer's intentions were when the documents were signed? There may be other terms and conditions here for consideration.
0 votes Thank Flag Link Sat Feb 8, 2014
It is the buyer who states whether he intends to occupy the property as his primary residence or not in the purchase agreement and in his application for the loan. If he in fact does not occupy the property but instead immediatley rents it out, he is guilty of defrauding the lender, and the lender could call the loan requiring the borrower to obtain new financing or be foreclosed on. The agent would only know what his client told him he was going to do. The agent would not have any liability if he reasonably believed that the buyer would occupy the property. If the agent had known that the buyer would not, and especially if he advised the client to lie in order to get a slightly better rate, then he certainly would be liable to the lender, and could be sued by the client for damages.
0 votes Thank Flag Link Fri Feb 7, 2014
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