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Author: CCinOC Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127234  
Subject: Re: Getting a mortgage with SE income Date: 7/16/2013 9:44 PM
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I would suspect that it would be difficult for a buyer to get an owner-occupant loan when the contract included a 3 month initial rent-back.

Exactly. This is a red flag for sure. I suppose a "gentleman's agreement" can exist for the rent-back, but I sure wouldn't include any mention of it in the Purchase Agreement--especially since occupancy fraud is top-of-mind to all lenders.

Occupancy Fraud Risk Increases 15 Percent in Interthinx National Mortgage Fraud Risk Index
http://finance.yahoo.com/news/occupancy-fraud-risk-increases...

Interthinx, a leading provider of comprehensive risk mitigation solutions for the financial services industry, has released its quarterly Mortgage Fraud Risk Report, covering data collected in the first quarter of 2013. With the debut of its new interactive report, Interthinx has made major changes and enhancements to its Mortgage Fraud Risk Index. It is now possible to explore different views of meaningful data simply by clicking on the various elements of the online report. According to the most recent analysis, occupancy fraud risk nationwide increased 15 percent over the previous year.

Besides, why are folks discussing what occurred in their real estate transaction years or even months ago? To make me wrong? Well, OK, but the practical reality is that you can throw out much of what you THINK you know about how a loan should be originated and refer instead to the comprehensively revised 1,300 page Fannie Mae Selling Guide that became the law of the land in 2013. Your transaction was then. This is now.

https://www.fanniemae.com/content/guide/sel011713.pdf

Then there's the recent phenomenon of "lender overlays" that exists at all lenders without exception.

How Lender Overlays Prevent Mortgages
http://finance.yahoo.com/news/lender-overlays-prevent-mortga...

You've reviewed the requirements for the type of mortgage you want. You've made sure you have the credit score, down payment and debt-to-income ratio (DTI) the loan requires. So why has your loan application been rejected? Stricter requirements called lender overlays are at fault. Lenders overlays are the rules of individual mortgage brokers and banks that are stricter than the rules that government entities establish for various mortgage products. Lender overlays also come in the form of stricter documentation requirements, such as having to submit much more paperwork (e.g., bank statements) for an FHA Streamline refinance, than the FHA itself requires. Paperwork that doesn't pass muster can also result in unexpected rejections. Lender overlays affect refinances, too. This article first details what lender overlays are. It then explains how you, as a borrower, can improve your chances of getting a mortgage despite lender overlays.

Finally, what does a "relationship" with the loan originator have to do with how a loan goes down? There's no super loan originator anywhere who has uber-influence over a lender. One could bring 50 loans a month in the door and there's not a lender in the land who would circumvent an Agency guideline to fund one loan over another. They just won't do it. If, however, you've got significant assets on deposit, you may get a "private banker" to bend the bank's rules.

But y'all know better than I do, so carry on.
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