Legal Question in Real Estate Law in California

We are purchasing a second property and plan to move in and we have our original home for rent. we are reaching the final paper work but we are being told that if we say that this will be our primary home (new home) we are obligated to live in this 2nd home and that if we do not move in, there is a possible that we can investigated and verified if it is true that we are living in the new home. And if we do not move into the property that we will be charged with a felony? Is this possible that if we decide not to move into our second property we will be charged with a felony?


Asked on 9/30/09, 2:15 am

1 Answer from Attorneys

Yes, it is possible. Making a false statement on a loan application or otherwise obtaining a loan under false pretenses has always been a crime. I'm not sure if it passed or is in effect yet, but there was a bill to clarify that it can be charged as "mortgage fraud" and charged alternatively as a misdemeanor or felony (previously it was only a misdemeanor, unless charged under general grand theft statutes). If you take out an owner-occupied mortgage in order to get better terms, rates or easier qualifying, when you know you are not going to owner-occupy, or you do not have any reasonable basis for representing you will owner-occupy, you could face charges. Generally, however, unless you default on the loan, no one will notice if you owner occupy or not.

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Answered on 9/30/09, 2:38 am


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