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Renting my newly purchased home

So I just bought a home 2 mos ago with full intention of living there but now I have to live with my parents and want to rent my new home. Do I have to tell my lien holder? by hmbrand78 from Charlestown, Rhode Island. Jul 6th 2020 Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,300 contributions

If you have already moved into the home, but now must go and take care of your parents for medical reasons, you should have no problem. However, if you bought this home as a primary residence and have never moved in, you may very well have a problem. Sadly, what you are describing sounds an awful lot like an Occupancy fraud scheme. When you buy a home, you sign an affidavit attesting to your planned occupancy. When you attest to occupy within 60 days and you don't, the lender is going to assume fraud, whether you tell them or not, and they will discover that you are not living in the home. If a recent health issue, like a stroke or heart attack that occurred AFTER you closed escrow, requires you to move home to take care of a parent, then you have a generally accepted life event that will allow you to defend against the fraud claim. In absence of such an event, the lender could very well press fraud claims against you that could prove devastating to you. About ten years ago, I had an acquaintance that did what you did, but did not have the life event. The bank filed a fraud claim against him. When it was over, he lost his house and the equity in it and was sentence to five years for mortgage fraud and ordered to pay restitution to the lender. So, in your case, I'd seek council from a Real Estate Attorney to determine your best course of action. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Licensed in Arizona, California, Georgia, Oregon and Washington ~ 480-889-9000

Jul 7th 2020
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,409 contributions

When getting a loan, you told the lender you signed paperwork saying you would live in the home for at least one year. If it was going to be a rental, you would have needed to get a higher interest rate, more strict investment loan. Because of that, people try to lie all the time to get the better owner occupied deal. With that said, it is all about the known intentions at the time of application and closing. If this truly came up two months after the fact, it is no big deal. If you knew you were renting it before closing, that is mortgage fraud.

Jul 8th 2020
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