Posing as owner/occupant to get better re-fi

[cmac2012]

A lady I recently started working for, she owns about 5 rentals and her contractor husband died about a year ago (age 54 ), was telling me today that she's going to try to fake living in one of her rentals so she can get a better rate on a re-finance.

Anybody know how risky that is? I mean you would think they'd investigate at least a bit, they're losing money on the deal, although she'll be going to a bank where she's a complete unknown, so if it's a new deal, that bank won't be losing anything as they had nothing previously anyway.

Too bad this lady's not a babe, she seems to like me plenty and that property . . . . . oh man . . .

[kerry]

Guy down the street from me spent a few days 'remodeling' a multi-unit into a duplex so his landlord could refinance at a lower rate. Remodeled it back the next week once the inspection was done.

I seem to recall reading that the penalties for the crime you describe can be substantial.

[cmac2012]

I was kinda thinking the lady might end up regretting it. She not a complete fool but doesn't seem all that savvy.

I told her she should actually try to live there for a few months while this is going down, and to get at least some mail there for a few years after. And she might have to lower the rent to get the tenants to cooperate fully.

[Medmech]

They do soft pulls on insurance and tax information and people are getting caught, its called fraud and a felony. People used to get away with it but with the current market conditions and upcoming extra verifications she may get caught. The rate difference is not a that big so I guess we know the cost of her integrity.

[Jim B.]

Originally Posted by cmac2012

I was kinda thinking the lady might end up regretting it. She not a complete fool but doesn't seem all that savvy.

I told her she should actually try to live there for a few months while this is going down, and to get at least some mail there for a few years after. And she might have to lower the rent to get the tenants to cooperate fully.

Greedheads like that who speculate, flip houses, and try otherwise to game the real property system deserve everything bad they get.

Shady lenders,(institutional and others) mortgage brokers, offshore investors deserve the same.

Sometimes when you engage in all that fancy footwork, you wind up tripping.

Could be a little Karma, going on, too.

If she gets caught, she will need a good attorney fast, and they don't come cheap.

[Mistress]

If you tell the truth, you don't have to remember.

[John Doe]

Originally Posted by Howitzer

They do soft pulls on insurance and tax information and people are getting caught, its called fraud and a felony. People used to get away with it but with the current market conditions and upcoming extra verifications she may get caught. The rate difference is not a that big so I guess we know the cost of her integrity.

Or false pretenses

I think the disillusion with these types is the huge tax rate difference, which is an even easier way to get busted.

[Jim B.]

Originally Posted by Mistress

If you tell the truth, you don't have to remember.

^^^^^^^^^I like that one.

I am going to have a sampler made.

[Medmech]

Originally Posted by John Doe

Or false pretenses

I think the disillusion with these types is the huge tax rate difference, which is an even easier way to get busted.

Nothing like paying $250,000 in fines and a couple years in the slammer to save 1/4%.

No need to get into frauding-up a HUD 1003!!

[John Doe]

Originally Posted by Howitzer

No need to get into frauding-up a HUD 1003!!

I was just asking a QUESTION man

W killed the toy deal, btw. I brought home yesterday and asked her to go for a ride with me and put the girls in the back and she mumbled something about tuition being pre-paid for the next five years first and wouldn't set foot in it

I wasn't holding my breath.

[Medmech]

Originally Posted by John Doe

I was just asking a QUESTION man

I'm justa Lawclerk notta Lawyer so don't sue me man.

[sd300td]

Originally Posted by cmac2012

A lady I recently started working for, she owns about 5 rentals and her contractor husband died about a year ago (age 54 ), was telling me today that she's going to try to fake living in one of her rentals so she can get a better rate on a re-finance.

It's usually the down-payment, 20% on investment prop. vs. 10% (or less) on owner-occupied, rather than rate that gets lowered. But who knows what different lenders are doing these days.

A lot of folks do it here in Socal and get away with it. I don't think banks spend much time checking up on their borrowers, especially if payments are being made as agreed.

[cmac2012]

Originally Posted by Jim B.

Greedheads like that who speculate, flip houses, and try otherwise to game the real property system deserve everything bad they get.

Shady lenders,(institutional and others) mortgage brokers, offshore investors deserve the same.

Sometimes when you engage in all that fancy footwork, you wind up tripping.

Could be a little Karma, going on, too.

If she gets caught, she will need a good attorney fast, and they don't come cheap.

I can understand it sounds a bit cheap but she's actually a pretty kind landlord (like, Grateful Dead speak, mannn). So far, everything a tenant has wanted, she's given it to them. Like one current job I'm doing, the previous owner put a small washer dryer in one corner of the kitchen (?!) and then just vented the dryer air towards the ceiling (double ?!). She wants me to vent it outside and while I was talking to the tenant, he said that a range exhaust hood would be nice (older house -- 5 unit giant house in the hills on a quiet street behind the U Cal stadium). Up til now, they had a fan that fit into the window frame with the window opened. Not optimal.

I ran it by the landlady, saying I could use the same exhaust port in the wall (middle floor of 3 stories) and put in a few more cabinets to hang the hood from and one on each side, as the kitchen only has one wall cabinet (more !?) and it's a 3 bedroom.

She said 'fine, don't get a cheap exhaust hood -- go quality.' Plus, every tenant of hers I've worked for loves her -- she's accomodating but no pushover.

She says since her husband died, she's losing money on some of her properties and it's got her a bit freaked out.

I'm going to print out these replies and show them to her, editing anything I might have said that's less than utterly polite.

And, BTW, thanks.

[cmac2012]

Originally Posted by John Doe

Or false pretenses

I think the disillusion with these types is the huge tax rate difference, which is an even easier way to get busted.

Hey dude, there used to be a guy here who used that handle.

Dunno what happened to him.

[raymr]

I bet a lot of people do it and get away with it. But if your gonna do that, you certainly don't go around telling people.