My New Outside Blog: Third Party Verification of Occupancy???? Fannie issues notice to lenders!

Got a client????????  Know a friend??????  Thinking of trying to "fudge" on the occupancy declaration when you're buying a home??????

I have never seen the logic or understood the rationale of anyone willing to sign fraudulent loan documents and risk activation of the "Due On" clause in the fine print of all mortgage documents that can (will) call the entire Note due in the event of fraud or sale. 

Moreover, the mere idea that a loan officer or broker would jeopardize their career or license is pure lunacy!

It appears Fannie is getting REALLY serious about preventing occupancy fraud and are advising lenders that they "may" (code for "should") want to hire a third party service to verify occupancy AFTER the closing of the loan....and they (lenders) might want to hold funds for third party originators (that would be mortgage brokers) until occupancy is verified. 

Most (if not, all) broker agreements with mortgage banks have buy back clause that the lender can hold over a broker's head for a specified period of time (usually 12, 24 or 36 months...but, I have seen a few with "forever" in the fine print)....There may come a time when your loan officer/broker has to be convinced about the occupancy of your new home purchase before they will originate the loan!

Have to wonder how restrictive and pervasive this practice will become.  Freddie Mac?  VA?  FHA?  Let's see, how long after funding would I be willing to wait for a commission?  

Frank and Brian at www.tbwsdaily.com have a great video today and I highly recommend checking out their site.  (BTW, I check them out everyday.  Sometimes a little over the top...but their info is spot on and I appreciate not having to hit the news wires for all my industry news).

Deborah Garvin

loanmonarch@yahoo.com

(619) 787-8212

"contact me when you need knowledge, experience and ethics in the financing process."