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So why would Rocket Mortgage, who is working on writing a loan for a condo that is under contract in a building where I'm the HOA President, ask me to lie about the # of units that are short term rentals?
There are 8 units, individually owned. 4 of them are currently active on VRBO, and another 2 are more seasonal as short term rentals. Our busy season is winding down here.
One of the "Triple Crown Bankers" at Rocket Mortgage literally asked me, when presented with the above info:
"Are you able to reply back and let us know there are less than 3 that you know of as the President of the HOA?"
Why would a lender give a chit about whether or not other units in a building were primary residences or rentals?
They're essentially asking me to lie about something in order to write the loan, unless I'm missing something. Shady?
So why would Rocket Mortgage, who is working on writing a loan for a condo that is under contract in a building where I'm the HOA President, ask me to lie about the # of units that are short term rentals?
There are 8 units, individually owned. 4 of them are currently active on VRBO, and another 2 are more seasonal as short term rentals. Our busy season is winding down here.
One of the "Triple Crown Bankers" at Rocket Mortgage literally asked me, when presented with the above info:
"Are you able to reply back and let us know there are less than 3 that you know of as the President of the HOA?"
Why would a lender give a chit about whether or not other units in a building were primary residences or rentals?
They're essentially asking me to lie about something in order to write the loan, unless I'm missing something. Shady?
Because it’s a riskier loan for them. Rentals, particularly short term rentals, are risky because the owners are more likely to default on a rental than their primary residence is their financial situation worsens. If your city decides to ban airBNB like some across the country have, that will leave your HOA in a tough spot. It is shady or the lender to ask you to say that if you’ve already answered that question, but this is a problem you are likely to encounter with all lenders.
Because it’s a riskier loan for them. Rentals, particularly short term rentals, are risky because the owners are more likely to default on a rental than their primary residence is their financial situation worsens. If your city decides to ban airBNB like some across the country have, that will leave your HOA in a tough spot. It is shady or the lender to ask you to say that if you’ve already answered that question, but this is a problem you are likely to encounter with all lenders.
Excellent answer.
Also the HOA president will the the one left holding the responsibility when that mortgage defaults.
Mortgage mankers get bonues for each mortgage they bring in and end of year BIG bonuses and travel, etc.
Qualified mortgage borrowers are fewer than before because of the increase in rates and prices of properties went up in Covid, many people can't qualify for a mortgage IOW. So lenders are seeking out anyone possible to bend the rules.
JP Morgan, Bank of America, and Wells Fargo just downgraded; stating U.S. Gov. capacity to service debt is now weaker.
Not a good sign.
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