Posted by LynnNC on 8/5/10 12:00pm
Msg #347748

Interesting situation re: occupancy

I had a closing today where the documents showed the property as a second home. The borrower was told that he could not claim his condo in Provincetown, MA as his PRIMARY residence, because , but that made no difference.

Interesting that a lender could make such a subjective decision.

Reply by PAW on 8/5/10 12:14pm
Msg #347757

... because ... ... ... ?

Was the house in MA a vacation property? I think MA requires homeowners to be a resident of the state in order to declare the property as their primary residence, and thus, able to reap the benefits. Did the owner have a MA license showing that property as their home address? It may be that the homeowner, when applying for the loan, specified the property as a vacation or second home. To little information to provide a reason.

Reply by LynnNC on 8/5/10 12:24pm
Msg #347761

It was the borrower's primary residence...

His MA driver's license showed the property address. He recently renewed his DL and also had his old one...both showed that address.

Reply by PAW on 8/5/10 12:27pm
Msg #347763

Re: It was the borrower's primary residence...

Well then, I'm a bit miffed too. Only thing that comes to mind is that the original loan was issued as a 2nd home or they are claiming another home as their primary residence.

Of course, you have nothing to do with it, but if I were the borrower, I certainly would be asking the lender a lot of questions. (Primary residence loans typically have a lower rate than vacation/2nd homes and investment properties.)

Reply by James Dawson on 8/5/10 12:28pm
Msg #347765

Re: It was the borrower's primary residence...

Sounds to me like "they" should be providing the reasoning behind that statement. Interest rates are usually higher on vacation property for example so that would be one clue. IMO

Reply by Linda_H/FL on 8/5/10 12:28pm
Msg #347766

Re: It was the borrower's primary residence...

Apparently that "because" did make a difference...

Not sure why they'd classify a loan primary residence as a second home loan - interest rates are usually higher on Second Home Loans.

Bets there's a divorce involved here? Just a silly thought.

Reply by LynnNC on 8/5/10 12:37pm
Msg #347773

Re: It was the borrower's primary residence...

His loan was for $195,000 for 20 years at 4.5%. He said that he felt that it was a good rate and was not lower because it was a "second home".

Reply by James Dawson on 8/5/10 12:40pm
Msg #347775

Re: It was the borrower's primary residence...

Something doesn't seem right but then again I can only give an uneducated guess about Ca.

Reply by LynnNC on 8/5/10 12:29pm
Msg #347767

I just looked at this post and realize I deleted some info..

...by mistake, so what I wrote was not clear.

What I meant to write was that he could not claim his condo in Provincetown, MA as his PRIMARY residence because Provincetown is a "vacation community"! It didn't matter that his DL showed that address and that he has utility bills showing that he was living there.

Reply by PAW on 8/5/10 12:37pm
Msg #347771

Re: I just looked at this post and realize I deleted some info..

Huh? Doesn't make any sense to me. I live in a "retirement and vacation" community. It makes no difference on whether or not the property is the primary residence. It's all based on how the property is used, not where it is. Again, if I were the borrower/homeowner, I'd be seeking some answers to lots of questions and possibly looking at legal actions.

Reply by James Dawson on 8/5/10 12:37pm
Msg #347772

Re: I just looked at this post and realize I deleted some info..

Just a question if you care to answer,...was his interest rates close to what to going rates are for primary residences?? Just wondering. thanks

Reply by LynnNC on 8/5/10 12:39pm
Msg #347774

$195,000at 4.5% for 20 years n/m

Reply by Frank/NC on 8/5/10 12:47pm
Msg #347778

I had something similar to that recently in that the borrower was living in a rental property and was renting his primary residence. He applied for a refinance and the property was considered to be an investment home. Both borrowers had drivers licenses from the State where the home was in but the lender said that as long as they were not living there, it would be considered a second residence.

Reply by ReneeK_MI on 8/5/10 3:28pm
Msg #347805

There's a lot of factors we never know about

For example, a person's claim that a property is their primary residence is going to be supported by the type of hazard insurance they have (and that is documentation reviewed in u/w), as well as the property tax being/not being homesteaded, and there may even have been something in the appraisal that didn't support the claim. Further ...could be the lien on the other property is for primary residence, and negates THIS one being 'another' primary.

Again, borrowers rarely have a full understanding of what's going on or even what's been explained to them. Does't mean this wasn't explained to him better than he's able to repeat it back. The part about Provincetown being a vacation spot might've been just one out-of-context snipit of an ellaborate explanation that breezed over his head (or he's simply choosing to selectively remember).

Reply by LynnNC on 8/5/10 3:40pm
Msg #347816

The property is his ONLY residence... n/m

Reply by Linda_H/FL on 8/5/10 3:48pm
Msg #347818

There's an area in Connecticut containing about

5 or 6 cottages - probably more but I know of this one (the name escapes me right now but it wouldn't matter to most anyway) - people own them and live there all the time - however, they are considered "vacation cottages" and there are restrictive covenants recorded in the land records that they are not to be used for full-time residences....yes the restrictive covenants are old but they're still there...thereby encumbering the property and affecting the use of the cottages.

Maybe that's the type of situation in this case.

Reply by ReneeK_MI on 8/5/10 6:51pm
Msg #347848

Ok, then that IS bizarre! Probably what Linda said? n/m