Occupancy Question

[Motown Matt]

We'll agree to disagree then. It's not black and white as far as I'm concerned. I've seen many typos in FNMA guidelines and all they need to do is add a comma after the word "work" and maybe you'd be satisfied?

The commentary quoted by CAN is poorly worded with syntax leaving much to be desired. However, reading "between the lines", the meaning points to scenarios with family members "helping" other family members that are either unable or have insufficient income to have their own mortgage.



It's pretty clear to me that you adding "AND" to the scenarios where it doesn't belong. There's a huge difference between "OR" and "AND".

This entire guideline was written to allow people to help either handicapped children or elderly parents who CANNOT work or have means to house themselves. Seems pretty evident to me by the wording. Besides those exceptions, it is clear based on the verbiage stated above the exceptions:

"Fannie Mae purchases or securitizes mortgages secured by properties that are principal residences, second homes, or investment properties"

and subsequently below that:

"A principal residence is a property that the borrower occupies as his or her primary residence."

Unless the occupants are handicapped children or elderly parents unable to work or qualify for a mortgage, it's not owner-occ. Pretty clear to me. I'm really not sure where the grey area is. It's about as black and white as anything I've read. The owner lives somewhere else. If their kids are bums and leeching off mom and dad, that doesn't make it a primary residence and a loophole for escaping financing restrictions for second homes. This is why these guidelines are written, to close loopholes, not open them.

 

[Motown Matt]

And if you're appraising a short sale and call it owner-occ when it's not, you'd better be prepared for a whole lotta hell or a whole lotta luck down the road if it goes through.

 

[Doug DeMars]

FTR, I never implied it was a primary residence...only being owner occupied. Owner occupancy has nothing to do with being primary or secondary.

 

[Mike Garrett RAA]

OK, what are the names on the title? If one or more of those persons are not living there it's NOT OWNER OCCUPIED. That's my opinion and I am sticking to it.

 

[Mark K]

OK, what are the names on the title? If one or more of those persons are not living there it's NOT OWNER OCCUPIED. That's my opinion and I am sticking to it.

Mine too.

If the owner of record is not occupying the property, I have always, and will always, call it non-owner occupied.

If the owner wants to convince the lender otherwise, have at it. I've been involved is a few of these scenarios and have consistently refused to change the report to 'owner occupied'.

Its NOT my place to determine if the kids are 'handicapped, unable to work' or simply deadbeats, or if the elderly parents are unable to obtain a mortgage or if obtaining a mortgage would just crimp their lifestyle, fewer day trips to the casino sort of thing.

 

[CANative]

There are only three options (boxes.) Owner, Tenant, Vacant.

Which do you check? Tenant? Look up the definition of tenant. All definitions involve the payment of rent and many include descriptions of the rights and property interest.

These don't seem to apply in the OPs scenario.

Alex... I'm just playing devils advocate.

 

[Motown Matt]

One of the definitions of tenant is "occupant".

Who is occupying the property? Not the owner... Look up the definition of "Occupant" and "Occupy" as well.

I am having a difficult time understanding the desire to state someone is the "occupant" of a property when they do not live there, and reside elsewhere.

 

[CANative]

The situation doesn't really fit the options and I don't think there is a wrong answer on checking the box as long as there is a narrative explanation. So it's not fraud and it's not misleading the client as far as the appraiser is concerned.

We're making too big a deal about this. The forum mantra has always been "we're not the occupancy police."

This is purely an underwiting/lender issue.

 

[sputnam]

Check 'Tenant' and comment that the property is occupied by the owner's daughter. Let the client decide whether to fund the loan or not.

 

[HF Mudd]

According to MerriamWebster.com:


ten·ant
noun \ˈte-nənt\
1
a: one who holds or possesses real estate or sometimes personal property (as a security) by any kind of right

b: one who has the occupation or temporary possession of lands or tenements of another; specifically: one who rents or leases (as a house) from a landlord


ten·an·cy
noun \ˈte-nən(t)-sē\
pluralten·an·cies

Definition of TENANCY
1
: a holding of an estate or a mode of holding an estate; specifically: the temporary possession or occupancy of something (as a house) that belongs to another

2
: the period of a tenant's occupancy or possession