Banks Looking At Owner Occupied Offers First Lately... Unscrupulous Investors Beware!

A reminder to some of the less scrupulous Investors out there. When Bank Owned Properties come to market and state they're only looking at "owner occupied offers" for the first 7-15 days, and you the investor decide to pose as an Owner Occupant to get your offer considered... You've just committed a Class B Felony. It's not hard to prove when you either a) turn around and change title to an LLC or Business b) attempt to re-sell the property (flipping) in less than a year or c) get caught renting it out within a month. The Banks are taking notice... I represent investors that have ethics (1 is an Attorney) and they take notice too..


  • September 01 2010 - Bremerton
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Answers (19)

Care to state what statute that would be?

While a bank can certainly choose to sell its property preferentially to an owner occupant rather than an investor, I don't believe any state has any law that would make misstating future occupancy a felony.
  • September 01 2010
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Profile picture for sunnyview
Tell the bank whatever they want to hear when you make your offer. Even tell them that you are plan to use them for your mortgage. As long as those "plans" are not a condition of the sale or the mortgage, the bank can deal with it when you change your mind.

Think of it as the consumer version of those nifty change at the whim of the bank credit card agreements. Turn about is fair game.
  • September 01 2010
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"You've just committed a Class B Felony"

...are you qualified to give legal advice? At a minimum state you are not giving legal advice, to seek attorney review, and when making a statement this strong, please try to cite a statute of some sort.
  • September 01 2010
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Profile picture for sunnyview
I am curious. Do you have a link to your class B felony information?
  • September 01 2010
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Interesting, I'd like to see some legitimate links as Sunnyview has mentioned. I've not heard anything of this sort...
  • September 01 2010
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  • September 01 2010
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Fannie Mae and Freddie Mac are both bankrupt, and under government i.e. public control. They should of course be trying to sell homes for the highest and best price. ANY restrictions on who gets to buy, guarantees a different demand, and thus a possibly lower price. Interesting policy, I guess if you don't give a $*it how much of the taxpayer's money you lose, you can afford to do social work instead of business.

But the point remains, if someone makes a cash offer, claiming they are going to be an owner occupant (thus no loan fraud) buys a home, then sells it or rents it, you are going to have to find a state or federal law that it violates to claim it is a felony, and I'm betting no such law exist.
  • September 01 2010
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Sunny - There's an Owner-Occupancy Affadavit they have you sign. You can't just change Lenders, Occupancy, or anything else that are terms of the sale as you would be in breach of contract.

Tiffany - Yes I am as in Washington all Real Estate Brokers are held accoutnable to the same standards as attorneys. And if that doesn;t work for you, my Managing Broker is a Real Estate Attorney and was who I recevied the information regarding it.

Roberto - Yes, I agree they should sell it to whoever pays the most, but they don't. It's still defrauding a Governement Agency and still a Class B Felony.

http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm00923.htm
  • October 13 2011
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I still think it will be very hard to 'prove'.

What if a true owner occupant needs to move for his job within 1 year.. will he be looked at as someone who just committed a felony as well?

I think anyone and everyone can claim to be an owner occupant and make up a story for why he needs to 'move out'.

In my opinion going after things like this is wasting money that could be used for more pressing issues then trying to see if someone bought a house under the right terms.. honestly...

And if not what then????

Waste more money on court cases?
A house back on the market again, which is costing money as long as it's for sale, maybe there were renters that are now displaced etc. etc.. what a headache..


  • October 13 2011
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Jeanine: 

Note that not one of the people claiming "its a clazz B felony... blah blah blah" can find a freaking statute to quote? It's like laws just drift around out in space or something...

Loan fraud is a crime. Buying a home with cash, I'm still waiting for one of these legal pigeons to point me to a statute...
  • October 13 2011
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Robert I did put a up a link to the fraud statue, but you obviously failed to read it. You're disagreement with how it's done or political ideals don't change the fact it's against the law.

If someone swears under oath (affidavit) that they intend to occupy, when in fact there is no intent to occupy, then that is fraud and perjury. When someone signs an affidavit they do so under penalty of perjury. It's not a claim but a fact. If you don't agree then do what you want at your own peril...

  • October 14 2011
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Owner Occ. affidavit. $10000 fine  Cant sell for more than X amount within X amount of time . Must stay movein within 60 days and must occupy for 1 year. All part of FNMA addendums. Nothing about Felony. Here is a link to the Affidavit.

http://sellstategcr.com/documents/FM_Owner_Occupant_Certification.pdf
  • October 14 2011
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Derek,

The Freddie Mac affidavit states "criminal and/or civil liability". It's fraud as I stated above and fraud against the government is a Class B felony.

I didn't just pull this out of hat people. It was discussed at length with Multiple Real Estate Attorneys. When you sign ANY legal affidavit you are subject to criminal penalties.

Just because you don't see "Criminal" or an Statute on the form does not mean it isn't illegal. You don't see any statements on products stating it's illegal to take it without paying, but you know it's theft all the same.
  • October 14 2011
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Once again, the original post said "BANK OWNED" not government agency owned... 

AND the link provided by Nick has only one case, whereby the buyer fraudulently claimed to be owner occupied to obtain an FHA loan... obviously loan fraud, but doesn't prove his original point at all...

If you wish to restate your claim, that lying to obtain a loan is loan fraud, well, that is fairly well known. 

as to derek's example, that is an addendum to a contract, and absolutely does not make anything illegal what so ever. If you break a contract, like any other contract, you are only at risk of CIVIL procedures, not CRIMINAL procedures. I could write a sales contract for a home that requires the buyer to do the maquarena in a grass tutu in the front yard at 8pm everyday, and owe a fine of $10,000 if they didn't...

Or more realistically, you could sell a home with a requirement that it be used ONLY as a group assissted living facility... whatever. Once again, doesn't make anything illegal.  
  • October 14 2011
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In order to kill the stipulations I have my buyers wait the 15 days. Then it's open season.
  • October 14 2011
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Only Freddie Mac, Fannie Mae, and HUD are doing the owner occupied stipulation as part of the Neighborhood Stabilization Program(NSP) and all 3 are government. They still refer to them as bank owned. It's fraud & perjury Roberto as it's not an Addendum but an Affidavit. There is a difference between the two which you obviously do not get.

AGAIN... If someone swears under oath (affidavit) that they intend to occupy, when in fact there is no intent to occupy, then that is fraud and perjury. When someone signs an affidavit they do so under penalty of perjury. It's not a claim but a fact.
  • October 14 2011
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http://www.law.cornell.edu/uscode/usc_sec_18_00001621----000-.html

http://www.fas.org/sgp/crs/misc/98-808.pdf
  • October 14 2011
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Profile picture for microdisney
If I want to purchase a property as a second/vacation home which I Have no intention of renting or otherwise making use of it
as an investment property, is that considered owner occupied? Or must it be my primary place of residence?
  • October 13 2012
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Profile picture for user1083612
What about the following scenario:
--one truthfully signs an affadavit to owner-occupy
--according to the affadavit, he occupies property and has no intent to do otherwise
--the affadavit says nothing about how long the property must be occupied
--after 4 months, the owner decides he would like to sell the property right away unless there are some legal constraints preventing him from doing so (e.g., a requirement to occupy for a year)
--owner is not forced to sell (as by a job transfer, etc)
--property was not a foreclosure.
 
Are there any legal constraints preventing a sale? Thanks!
  • January 01 2013
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