As a regular speaker at 2 local Sacramento Investor Clubs, a large percentage of our business is non-owner occupied purchases.
I got a call today from a gentleman who wanted to buy an investment property in the Sacramento Area. So far so good.. He had plenty of funds for a down payment...check! He had a great employment history.. check! Then the conversation turned to interest rates and it went south from there.
When the caller realized there was a big difference in interest rates between an investment purchase versus an owner-occupied purchase... all of a sudden the purchase was now going to be for his primary residence.
I had to explain to the gentleman that stating he would live in the property and then turn it into a rental after closing would constitute mortgage fraud. The potential client did not seem to understand what he was asking me to do by turning a blind eye to this small detail.
I explained to the gentleman that there was no way I was playing that game. I tried to get him to understand that he was asking me to put my license on the line and risk my lively hood so that he could get a better interest rate.
I got the impression that this gentleman did not think I was being "creative" enough to earn his business.
What he did not realize is I was trying to get off the phone because there was no way we were going to do business together.
It amazes me with everything that is going on in our real estate market that borrowers are still willing to put themselves in jeopardy as well as the service providers that they hire just to earn an extra buck.
It reminds me a local mortgage broker (whom will remain nameless) who was actually arrested recently because of mortgage fraud and now may serve up to 30 years in jail. I looked up to this man and actually thought about going to work for him. For a quick buck (well almost a million from what I have read), this guy got greedy and thought he could trick the system. Not only will he loose his business (since his face is all over the news) he may not see his young kids grow up. And for what ...money. NOT WORTH IT! I hope for his sake this is all a misunderstanding.
A commission will never be worth jail time to me so please do not call me if you are interested in this type of "creative financing"!
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