I just bought a home to rent out, is my realtor lying to me?

October 31st, 2010 | by admin |

I own a home in which I live in full time, I purchased this rental home to strictly rent. In order to purchase the home before property investors, my realtor told me to tell the bank this rental home would be my primary residence, so I did. Will this come back to screw me because I already own a home and have no plans on living in this rental property.
I bought the home for cash, no mortgage is taken out on it…

If it was owned by HUD you committed fraud and you cause you problems, you committed a felony against the USA.

If it was privately owned there is no fruad if there is no mortgage.

  1. 9 Responses to “I just bought a home to rent out, is my realtor lying to me?”

  2. By The Son of Rage and Love on Oct 31, 2010 | Reply

    I would not lose any sleep over it, but you have committed mortgage fraud. Keep up with the payments and everything will work out fine. Start missing payments and if they find out you are renting it and not living in it, you will have a problem. Your real estate agent is a shyster.
    References :

  3. By Steve D on Oct 31, 2010 | Reply

    It will screw you if the bank finds out. Since you listed the house as your primary residence instead of an investment property, you probably got a better rate on the mortgage as well as a lower down payment. Depending upon the terms of your mortgage, if the bank finds out, they could call the loan, increase the interest, or any of a number of other steps, none of which are favorable to you.
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  4. By Caveat Emptor on Oct 31, 2010 | Reply

    If you got a loan that is contingent on using the property as your primary residence, it could indeed bite you. But you are as "guilty" as the realtor.
    References :

  5. By Dana Phillips on Oct 31, 2010 | Reply

    Yes, you committed mortgage fraud as I understand it. Your Realtor may have blame if they gave you bad advice. What did you tell the mortgage company you were doing with the home you live in? Did you sign the closing docs or did someone sign them for you?

    Question: If your dentist told you to pull out your own teeth, would you do it?

    I’m not saying there is no blame on the part of your Realtor, but YOU made a conscious decision and now your conscience is getting the better of you and you are playing the blame game.

    From Wikipedia:
    "Mortgage fraud is a term used to describe a broad variety of criminal actions where the intent is to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained had the lender or borrower known the truth. In federal courts, mortgage fraud is prosecuted as wire fraud, bank fraud, mail fraud and money laundering, with penalties of up to THIRTY YEARS IMPRISONMENT." – "Occupancy fraud: This occurs where the borrower wishes to obtain a mortgage to acquire an investment property, but states on the loan application that the borrower will occupy the property as the primary residence or as a second home. If undetected, the borrower typically obtains a lower interest rate than was warranted. Because lenders typically charge a higher interest rate for non-owner-occupied properties, which historically have higher delinquency rates, the lender receives insufficient return on capital and is over-exposed to loss relative to what was expected in the transaction. In addition, lenders allow larger loans on owner-occupied homes compared to loans for investment properties. When occupancy fraud occurs, it is likely that taxes on gains are not paid, resulting in additional fraud. It is considered fraud because the borrower has materially misrepresented the risk to the lender to obtain more favorable loan terms."
    References :
    http://en.wikipedia.org/wiki/Mortgage_fraud

  6. By spalmer on Oct 31, 2010 | Reply

    If you don’t have a mortgage… what did the bank have to do with it?
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  7. By the kid on Oct 31, 2010 | Reply

    Yes, it may come back to screw you if your loan requires that the house be your primary residence.
    References :

  8. By realtor.sailor on Oct 31, 2010 | Reply

    If you bought the home from FNMA, it’s a $5,000 penalty for mis-representing your status as an owner/occupant.

    realtor.sailor
    References :
    I sell FNMA homes

  9. By real estate guy on Oct 31, 2010 | Reply

    your post doesn’t make sense. You paid cash, but you spoke to a bank. Which is it.

    YES!!!!!! if you tell the bank that you will live in the property and you are actually buying as an rental. YOU HAVE COMMITTED MORTGAGE FRAUD. A FEDERAL CRIME.

    At settlement you will actually sign a legal document that the mortgage given is for a residential/primary residence loan. The lender WILL know when they mail the statement each month to a different address.

    Your agent should be reported.
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  10. By Landlord on Oct 31, 2010 | Reply

    If it was owned by HUD you committed fraud and you cause you problems, you committed a felony against the USA.

    If it was privately owned there is no fruad if there is no mortgage.
    References :

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