Here's a Tricky One

I have a homeowner who was laid off, so he does have that hardship.

However, when he married his wife last year, they moved into her house and rented his out. His name is NOT on her title and her name is not on his, however, the tenant is not paying rent and with him not working, he wants to do a short sale. Bank is CitiBank, one loan. His payments are current.

My question is, does this count as a primary residence? It's the only house he owns so it seems like it wouldn't.  Any advise from the wise ones?

Thank you!

tamara

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Replies to This Discussion

Permalink Reply by Mike Rosania on February 29, 2012 at 9:44am

If there is a tenant in the house, I cant see how it would still be considered a  primary residence.

Permalink Reply by Tamara Dorris on February 29, 2012 at 9:46am

I agree Mike, but it's the only house he owns. It will be interesting, to say the least.

Thanks for commenting.


T

Permalink Reply by Cheri Murphy on February 29, 2012 at 10:21am

Have seller be very upfront about the situation in the hardship letter.  Shouldn't be a problem that it is not primary residence as long as everything is disclosed upfront.  The problem will be if it is not disclosed that he no longer resides in the property.

Permalink Reply by Tamara Dorris on February 29, 2012 at 10:24am

Thanks Cheri, very good point!


I guess my concern is any less favorable conditions....with "investors" there is not the tax break and they are sometimes asked to contribute...at least in my experience.


And we will disclose that he's not living there and that someone is but not paying rent.


Thank you!

Permalink Reply by Tamara Dorris on February 29, 2012 at 10:35am

Don't worry Brian, I wouldn't lie! Yikes! I will call the bank and get their feedback.
Thank you!



Permalink Reply by Bryant Tutas on February 29, 2012 at 11:36am

Tamara. It depends. Primary residence for HAFA and for the IRS do not require the seller to be currently living in the property. Just that they recently did. I think it's 2 out of the last 5 years. Just have the seller tell the truth and nothing but the truth and they should be fine.

Permalink Reply by Tamara Dorris on February 29, 2012 at 11:55am

And this is why they call you Broker Bryant.
Thank you...perfect input.

xo

Permalink Reply by Kevin - Greenville, SC on February 29, 2012 at 5:09pm

Non-GSE Loans are 12 months. Fannie and Freddie are 90 days.  This is from the last date of occupancy until a HAFA SSA is issued. NOT from the time the Borrower applied for HAFA.  Rule # 1 through # 10 - Do NOT Vacate if at all possible (HAFA or not)

Permalink Reply by Stacey Wilson on March 30, 2012 at 12:56pm

I have a client who just went through a divorce, and moved out about a year and a half ago.  Divorce just finalized.  He is the only one on the mortgage and the only one on title.  It is the only home he owns.

Of course, during the divorce, he moved out.  The ex-wife and his daughter live there.  The lender stated they need to meet 3 of 4 test: address must be for the property on the income taxes, bank statements, pay stubs and/or homeowner insurance.  I know the insurance and taxes are the property, but his bank stmts and pay stubs say his rental address. 

The bank doesn't get it... what is your experience with this - is this still primary, though technically he doesn't sleep there?

Thanks!

S.

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