Tenant occupied - Lender wants me to check "owner occupied".

[Peter LeQuire]

Just put the comment in

"The borrower reports that they occupy the property. In lieu of information to the contrary I assume that disclosure is factually accurate."

Which of course, is all you really know, anyway. You already have pics showing the property is occupied so its apparent it isn't vacant. Anyone who is actually reading the report can decide for themselves the extent to which they want to follow up on the occupancy.

But the OP has "information to the contrary", n'est pas? As to a reader, wouldn't a reader assume the appraiser's categorizing the property as OO is "reliable" information? An appraiser can't "prove" owner occupancy, any more than she can prove gravity, but, given what the OP wrote in the OP, I believe that to report the property as owner occupied is contrary to the information observed at inspection. Others may have a different opinion.

 

[George Hatch]

Reasonable people may disagree on this one. The way I would characterize the situation is that the appraiser knows what they saw but they don't know - and can't know - what they didn't see. Meaning, they don't know that the owner doesn't live there. It's an assertion that - when contested - they can't prove. All they can say is that someone other than the owner met them there and the house had a lot of beds.

Moreover, if the borrower told them they occupy the property that statement DOES fall under the category of what the appraiser saw.

I just don't think the appraiser has any cover or support to be offering up their opinions on this one.

 

[Proactive]

1. Owner mailing address does not match subject address.
2. Some guy (possible prop mgr-limited English so I don't know more about him) met me at the property.
3. Every bedroom had several beds and all appeared to be separate room rental leases.

Sorry, it's occupancy fraud. I will not be complicit with it. There are multiple occupancy check boxes on the 1004 for a reason. I would check tenant occupied, as you have done, and let the lender provide evidence it is not.

Edit: Just realized this thread is from Monday; most likely the OP has made a decision and acted on it. I've had two instances of occupancy fraud attempted in twenty-five years. Both times I checked tenant occupied, both times they howled, and both times I was right. Just be sure. Damn sure.

 

[Meandering]

Thanks Joyce.

We are the eyes and ears of the Lenders who don't want to see or hear anything that could translate into a NO for them.

 

[Deleted member 128537]

In my market it can be a bit debatable since it is a large second home market. We have many people that own homes and then rent them on a day by day or week by week basis. They are managed by local real estate brokers. Most of the time when I go into these homes they are empty. From time to time (rarely) a "tenant" is there, but they are going to be out in a few days. They aren't rented year round, no leases, and the owner is on all the bills. I mark them "owner" occupied all the time, because I believe "tenant" on the form implies more of a month to month lease arrangement. But I have to admit it's a gray area. Sometimes I have to do a 1007 rent schedule on them (which is next to impossible), and even an operating income statement because the income from the homes are reported to the lenders.

 

[Peter LeQuire]

Thanks Joyce.

We are the eyes and ears of the Lenders who don't want to see or hear anything that could translate into a NO for them.

We are also targets for aggrieved lenders, regulators, auditors, GSE's - the list is pretty long. Being outnumbered, I prefer to assume the more defensible position. Given the OP's OP, "tenant" occupancy is - IMO - the more defensible position.

 

[Joyce Potts]

Well met, Marion! Best to err on the side of caution from a liability standpoint, I agree.

 

[Meandering]

A couple of years ago, or so,
I read that a wife could have a second property in her name alone, and be qualified as her primary residence, if she lived in a different house with her husband, and that house was in the husband's name alone. I wish I could find that reference.

It is a legally complicated question that should not be asked of us.

.

 

[George Hatch]

I guess I don't get too excited about the issue one way or the other is because (for example) I've received a number of rent rolls from property owners over the years that didn't jibe with the prevailing trends in the rental market. Among other things various property owners have told me that turned out to not exactly be the case. I normally take note of their assertions and then just go ahead and appraise the property; and let the client deal with any disconnects if they're so inclined. I have no personal stake in calling someone a liar, especially when I'm going to value the property based on the market value anyway.

This question is like the one where they ask whether there are any physical or structural deficiencies - yes or no. Or any environmental conditions onsite or nearby. I don't like being asked the question on an unqualified basis and without explicit acknowledgement of the IRL limitations of my SOW. So I qualify my answer with what I can see so that the reader understands the limitations that are involved.

 

[Joyce Potts]

A couple of years ago, or so,
I read that a wife could have a second property in her name alone, and be qualified as her primary residence, if she lived in a different house with her husband, and that house was in the husband's name alone. I wish I could find that reference.

It is a legally complicated question that should not be asked of us.

.

That's another great point, Marion.