I am finding that more and more latley my borrowers will ask during the initial interview: "So, what if I say I'm going to live there, but I want to rent it out instead?"
About this point in the conversation my stomach turns. Occupancy is a BIG issue. I thought these statements from a Mortgage Blog I was reading today were sobering:
The Wall Street Journal quotes The Federal Bureau of Investigation as stating that mortgage fraud led to losses of $1 billion last year, more than twice that recorded in 2004.
Chip Burrus, assistant director of the FBI's criminal division states that some criminal gangs involved in drug dealing and other street crimes have been attracted by the large sums involved in mortgage fraud. "It's more profitable and less risky," he said.
In the past it was usually borrowers who were the target in mortgage scams, but more and more the target now is the lender.
With just one California Agency, Occupany fraud accounted for over 53% of the claims filed with them.
Some consumers, and even some Realtors & Loan Officers we have encountered seem to have the belief that telling a "white lie" about occupancy is no problem, a slap on the wrist at most.
So unless Jail time sounds fun..
Borrowers: Dont lie abour your occupancy!
Realtors and Loan Officers: Dont encourage your borrowers to lie about your occupancy!
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