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Occupancy Fraud, We're Watching You
It used to be the number one form of fraud: a buyer saying they intended to occupy a property when they never did.
If you don't know why an applicant would state they intend to occupy a property when they know they are purchasing it as an investment it has everything to do with being able to qualify for the loan. Lender guidelines for owner occupied properties are much less stringent than they are for non-owner occupied properties. Risk to the lender is much higher on investment properties therefore the gauntlet to approval for an investment loan is tougher than it is for an owner occupied loan. 
Owner occupied loans are easy to obtain on properties valued around $150,000 up to 100% financing even with stated income in most areas of the nation. In declining markets today many lenders are limiting investment property financing to 80% or even 70% while owner occupied loans are still allowed up to 90% or even 95%.
Until about 2003 this was a very common process but as the market loosened and more sub-prime loans were geared toward investors occupancy fraud began to decline and document fraud, appraisal fraud and stated income fraud took the lead. Now that the ... more

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