Is This Defauding A Lender?
If I bought a house saying it was going to be my
primary home, so I can get a low interest rate, and
so I don't have to put more than 10% down, and
never move into it, and the tenants have all the utilities in their names, how could the lender find out? What would they do? How often do they check? If I also increased the salesprice slightly and asked the seller to pay my lenders fees, is there any problem?
It's not the first one that'll get you anyway. It's the 2nd or 3rd, or maybe in the 4th. When those lenders run the credit checks and ALL these primary homes come up, so will the questions.
You might want to consider another line of work, DBenson. Several people have given you sound, positive advise to NOT do business this way and still you question it. Adding, "I know someone who" doesn't make it any more right or legal, whether they've been caught or not. If this guy jumped off of a six story building and amazingly survived, would jump, too?
BTW, "cheating" on your taxes is illegal, too.
Roger
Here's some advice:
#1. Don't ask if deliberately misleading your leader is fraud, because what you really want to know is, "Will I get away with it?"
#2. Don't ask financial advice from people who cheat on their taxes.
in a word yes I believe that would not be exactly honest... NO way for anyone to business....
Real Estate is a lot similar to the Mopnoply game, except here, you don't have a Get Out of Jail free card
[addsig]
Be legit or else the county's orange jumpsuit must fit!
Eric & Rosa
[addsig]
Your biggest problem is if you ever had to make an insurance claim, and you said it was your primary residence. Then they could say, whoops, you have no claim. Them you lose it all. It's just not worth the extra 1/4 or 1/2 point!!!
Be honest in everything you do, it will get you much farther. Besides, how many times are you expecting this to work before the lender figures out that you are not living in 5 houses as your pimary res.
Being dishonest in real estate or other dealings indicate you have lack/poverty consciousness. I know, because I have worked through mine.
The Universe is abundant, and so are the deals. Ask yourself if the amount in interset paid over the life of the loan is worth going to jail, or hurting others you love and that love you.
Careful!
Big time, possible criminal, FRAUD to tell lender one thing when facts are something else.
And in today's economic climate it's too easy to find a friendly money source to take any chances with possible illegality.
Best wishes
John Merchant
If your honest, you won't have to remember who you lied to last.
I know someone who has done it with Washington Mutal. They gave him the "primary residence"
loan at a lesser rate, etc.... He says they never check after the loan closes. I called Washington Mutal and asked if anyone from their firm ever checks on this, and they said NO. Only an appraiser goes out to the property before the escrow ever closes. I've looked all over the web searching for actual loan fraud cases, and I can't find any "little fish" being sent for the slaughter to set an example to the public. My friend says all he has to say is his circumstances have changed and he was unable to move into the property. That way the lender can't charge him the higher rate. He says you have to work the system that way, kind of like people cheating on taxes (according to him).
If you tell the lender it is to be owner occupied and your circumstances change it is not fraud. If you tell them it is to be owner occupied, and never intend to live there it is fraud. There may not be many cases of people being convicted for this, that does not make it right. Insurance problems as stated above, negative press, and a dirty conscience should be enough to keep you honest. Negative press affects us all. Honesty is always the best policy.
Jeff
One factor you are leaving out...Risk why increase risk for a few bucks a month?there isn't enough money involved,there are better loan products than lying and cheating.And better ways to improve your financial position.
Mike
Come On Guys,
Could anyone really be this dumb??? This has to be a joke.
Really imagine the conversation with the bank:
"Hi, Washington Mutual"
"Yeah, Hi. Ugh my name is....John Smith and I was wondering if I purchased a house as Owner Occupant, but then rent it out, if you would care?"
"Of course not sir"
"Oh..okay. But, you know, would you ever check on me?"
"Of course, not sir."
"I mean I would never do that, but I just wanted to check.. And I sent four more loan apps in today; can you mark all of those Owner Occupant?"
"Of course sir. Anything else?"
"No thanks"
I have tears rolling down my checks. NO ONE IS THAT STUPID.
But DBentson, if you really are this stupid, when you are makinge my license plate, please make it say WINNER. I have always wanted that one.
Your concern with this dishonest action is NOT the lender but rather insurance!
I will say it once only! YOUR INSURANCE POLICY WILL NOT, NOT, NOT PAY out on any loss!!!!!
If the home is damaged, burned down, burglarized, etc. You will be SHIT OUT OF LUCK!!!!
Though we're talking two seperate issues here. What you tell the lender and what you tell the insurance company & take out a policy for..
I emphasize you MUST be honest with every detail you tell the insurance company in relation to your policy otherwise it will use that as an escape clause to NOT pay out for any loss!!!!!!!!
And as for a credit check, or property records, etc. You could get around all that with dishonesty, "I move alot,", try to conceal it by then deeding propertys to land trusts, etc..
It's not worth the hassle, if you can't buy propertys at a good enough price to make a profit without being dishonest you shouldn't be doing business..
Chris,
NOW DID THAT ANSWER YOUR QUESTION ???
BAD BOY
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