Things never change- potential Occupancy Fraud?

[Geoff Hatcher]

FHA - Owner occupied loan appraisal from AMC.
Call owner on Friday to schedule, reply "I'm off all day Monday and can meet you down there anytime" Enter the property, minimal furnature, boxes piled up in rooms, A completed Rental property condition form is on the kitchen counter indicating the owner/landlord and a $2000 security deposit. Ask owner if someone was moving in or out? He indicates he is having marital problems and has a couple of friends moving in the the other two bedroom to help out. About this time cable company shows up to install cable for new tenant. Google the address, over a dozen different rental sites list property for rent for $1850/month with tenants paying all utilities as most recently as two weeks ago.

Contact client tell story and what was noted and forward documentation of rental offerings. Ask if I should mark occupancy as owner and/or tenant based on what owner indicated and then disclose what was found in the normal course of business as to the rental offerings, etc.

Client repsonds - PROCEED = PRIMARY RESIDENCE

Message:
Good morning,
Please proceed as primary residence.
The client has sufficient documentation for determination as primary.
He is living in the property.

Thanks

Enquire again....

Message back is

Hi – I fully understand your concerns and have explained all issues to the bank. They stated to proceed as primary.
Please complete with the information provided to you by the borrower.


Looks to me that the property is a rental. I know I wouldn't be meeting someone "down there" on my day off. Offering was not in roomates wanted and market would not support two roomates paying $1850/month and all utilities for the owner that is living there. Plus the abundance of recent for rent advertisements.

m2:

 

[Smokey Bear]

Seems to me that the property is vacant, and that we're talking about intended use. I'd mark vacant, unless there's enough furniture and 'stuff' to make it liveable, and include all of your info supporting tenant occupied/or 'for rent' as well as the comments from the lender, then stick to your guns when they ask you to take it out. BTW, is this an AMC that is requesting this or the underwriter? You might want to ask for it IN WRITING from the underwriter, on letterhead or at least showing the full email tracking info, and I'd still include your findings.

 

[Geoff Hatcher]

Enough furnature to appear occupied. This is the AMC's E-Mail per the bank client.

 

[Fritz in NY]

I like the "enough documentation" responce. Hello, I was just there and this is what I saw.....type it up, send it out as tennant (If livable) and bill them. Will likley end up in collections.

 

[NorthTexValuation]

FHA - Owner occupied loan appraisal from AMC.
Call owner on Friday to schedule, reply "I'm off all day Monday and can meet you down there anytime" Enter the property, minimal furnature, boxes piled up in rooms, A completed Rental property condition form is on the kitchen counter indicating the owner/landlord and a $2000 security deposit. Ask owner if someone was moving in or out? He indicates he is having marital problems and has a couple of friends moving in the the other two bedroom to help out.

Based on the the owner's statement "meet you down there" sounds like he does not live there now and "roommates moving in" indicates they are not occupying on inspection date either, so I would check "Vacant" and explain everything else. I would certainly not check "Owner" based on the information you have detailed here.

 

[Mile High Trout]

Too bad this surfaced in a refi scenario.

Realtors make great resources to help with this issue, because it's typically a mandate that they stop this kind of thing before it get's to the appraiser. I remember a story of a Realtor being in a similar FHA specific situation, and she stated a refusal to continue on with the sale, and brought the property back to MLS. FHA is an owner occupied gig unless specifically stated otherwise right?

FHA help desk will also take a second look at this, if you inform them. You'll lose the client though, because the client will know you told on them. But you may lose the client anyways because you're about to stir up waves. In that scenario, I find it helpful to have the advisement of the FHA helpdesk under my belt, in case of client conflict. You've just got to play the numbers and there are more clients out there and they're not supposed to operate that way. FHA may be happy to call them and set the client straight on proper reporting, if you actually escalate the situation that way.

 

[Lobo Fan]

I do not consider myself to be the occupancy police. I would put the data you have in the report and make notes that the actual occupancy could not be determined. Not sure if you want to die on this hill.

 

[CANative]

The owner met you at the property and said he was living there. The client said the owner is living there.

You're Joe Appraiser, not Joe Friday.

Disclose what you found out (rental history) and move on.

 

[Riick]

I own a house and was looking to rent it out.
I had several nibbles, but....Wife & I had a big falling out.
I move my stuff out, and into the rental house.
Now I decide to refinance the house since it NOW comes under the heading of owner-occupied!
Appraiser calls me and wants to inspect on Whenever at Whatever time.
I tell him I'll meet him there, anytime.
I'm employed and need to leave work.
What exactly is the appraiser's problem??
That someone applied for the rental, and I still have the paperwork?
That I'm getting cable TV installed?

 

[rowdydog]

check county records for 1) mailing address of owner, if not same as subject, then it must be a rental, check all properteries owned by "owner".