Legal Question in Real Estate Law in California

How long do we have to stay in our primary residence after refi to avoid a mortgage fraud?


Asked on 8/07/09, 3:24 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I don't know of any fixed period set by law. I believe it is a question of your intent at the time you applied. If you moved out after two weeks, you'd better have a really good excuse! On the other hand, maybe even living there two years would be insufficient if the lender could prove that you had a definite, committed plan to move and rent after those two years elapsed.

Another set of facts that may help to prove or disprove fraud in a mortgage application stating intent to make a newly-acquired place your primary residence would be whether, upon accepting the funds and signing the closing papers, you were ready, willing and able to move into the new house, and your old house, if any, was genuinely on the market, sold, in escrow or other facts showed you were committed to being "out" of it and "in" to the new place securing the loan in question.

Other unpredictible factors may tend to show that a move-out was not premeditated, such as an unexpected job transfer, serious illness, or the like.

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Answered on 8/07/09, 9:50 pm
Terry A. Nelson Nelson & Lawless

As long as the lender thinks. If there was actual application fraud, they would have 3 years from discovery under CA laws, but there are also federal statutes they can sue on, and there are federal criminal charges they could bring. If there is not application fraud, and you can show your finances changed by unemployment or something, you should be ok. If you really need legal help, feel free to contact me.

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Answered on 8/09/09, 4:57 pm


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