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FHA Streamline Mistake Discovered After Closing

I discovered a mistake in closing after refinancing.  I had refinanced as an investment property.  When I closed there was all this commotion because of the lateness of the paperwork and the notary's printer.  We signed everything in a rush. Now that I've read through the paperwork it looks like we refinanced as a primary refi.  I already have a primary residence that I took a mortgage out on.  How do I fix?
  • October 11 2013 - US
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Answers (15)

Most lender have an overlay that they will not do an FHA streamline refinance on investments. FHA does allow it. When did you close? There is a document you signed that says you will occupy the property for 12 months. FHA might come check and make sure it's a primary residence. Also there is no reccsion period on refinancing a investment vs primary. That should have thrown up a big read flag right there.
  • October 11 2013
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So how do I fix?  The loan has closed and now I've discovered this mistake even though I closed a month ago.  I don't want to have this be a problem so I'd rather correct    
  • October 11 2013
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You stated you " had refinanced as an investment property ". Are you saying you applied for this transaction as an investment property or refinanced the same property in the past as investment property? What address is listed on the application as your current residence, this address or the other property you own?
  • October 11 2013
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You certainly need to make sure it is correct on the paperwork because it could potentially be seen as mortgage fraud and called due and payable at once.  Make sure you speak with your lender ASAP to get this corrected.  The lender should want to make this right for you but they would also need to make it right for them as well because the loan would not be able to obtain an FHA guarantee and would be unsalable on the secondary market.  If you feel you are not getting answers to your questions quick enough, speak to your closing attorney.  I hope this works out for you.
  • October 12 2013
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Can the lender correct this? It's already been a month since closing and I see now that the paperwork is wrong. 
  • October 12 2013
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They may not be able to fix it a month later. 

  • October 14 2013
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So what recourse would I have?  I've reviewed my paperwork and I can't see anything about primary or secondary house.  
  • October 14 2013
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Non Owner Occupied would show your present address as a different address than the subject property, both listed on page 1 of the application, page 3 shows the schedule of Real Estate which should reflect Rental by the subject Address and Page 4, line L, asks the question, "do you intend to occupy the property as your Primary Residence". If you applied for the loan as non owner occupied and that is reflected on the application, underwritten and approved as non owner occupied, then the Lender should be able to have you resign a few docs to correct. How does the application read?
  • October 14 2013
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It shows the primary address as the rental property.  The paperwork looks to be wrong.  We closed on two properties within three days of each other and this looks to be wrong.  Obviously you can't have two primary residences so this is just wrong.  We closed with a notary and not a closing/settlement attorney and everything was done remotely.  Ugh. 

I'm speaking to my lender tomorrow to figure this out.  There is no way I wanted a rental property to be listed as a primary residence. 
  • October 14 2013
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The lender should have caught this themselves...  How does it even make it through Underwriting, without having someone confirm addresses on driver's license, paperwork, etc.!??

Answer to your question is, you probably can't "fix" it... You may need to contact the lender and tell them-  Put the legal responsibility on them...

FHA Streamlines are ONLY allowed on a Primary Residence, which is why they require you to sign a form stating that you'll be living in the property for at least 12 months following the refinance-

Good Luck!
  • October 14 2013
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According to HUD, FHA DOES allow investment properties to be refinanced without appraisal.  

I explained to the lender that the property was temporarily my primary residence while I was looking for a new tenant.  During this period of residence, my homeowners and driver's license still had the address on it.

I talked to my loan officer multiple times about whether a streamline would do for my property.  I explained that while it was primary, I was already looking at another house and that I would be closing on the other house as my primary.

Thanks again for all the advice.  You guys are really helpful!


  • October 14 2013
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Did you sign on the investment property with an answer to this question:  "do you intend to occupy the property as your Primary Residence?".
  • October 14 2013
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FHA's Streamline refinance will allow you to streamline a loan that is now considered an investment property. The question for you is, did the initial application, signed by you with the disclosures have the subject property marked as "primary residence" or "investment"? If the property was listed as your primary residence, on the initial application, then unfortunately, you share in the resposibilty of the misrepresentation and I would reccomend that you let it lie... If at the time of the application, the property was marked as an investment, then there was clearly an error on the lenders part. I would press the lender to make corrections. Mortgage companies have been known to check occupancy status after a home loan closes. If you declare you are living in the house but you've moved out, it could spell financial disaster for you.
  • October 14 2013
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Who performed this clusterfucomoty for you? What state are you in, Confusion? This is what is wrong with the world. Nobody who gives a dam is paying attention, until after the fact. Was closing number one a FHA loan too? How are notaries still closing FHA loans? My god, has your legislature been asleep for seven years? I hate to sound like an asHole, but you and/or your Lender are examples of why I just had to spend a thousand dollars getting a new license, to replace one I already had for fourteen years. I had to be fingerprinted, background checked, rectally examined, frisked, and tested, yet this krud is happening under the noses of FHA Lenders. This is infuriating. You need to report this "mistake" immediately or suffer the consequences of your potential culpability. I hope you're exonerated, but someone needs to pay.
  • October 14 2013
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Now a business day has passed since you posted, who did you call today to point out this error and get it rectified?  

Signing quickly because of printer issues is similar to "my dog ate my homework" excuses.   You are still responsible for everything you signed.

Having the home for your primary residence for three days after signing isn't enough to justify it as a primary residence.
  • October 14 2013
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