Can BPO lead to loan being called?

Question

Hi all,

My wife and I have done a live-in flip for our current home and are getting ready to move.  I talked to our loan servicer about removing PMI since we have created some substantial equity.  They agreed and will be sending a broker to perform a BPO.

My question is, since it will be fairly obvious that we are moving and thus that this will no longer be our primary home, should I be worried that the broker will report this back to the servicer and that the servicer will in turn call our loan?

Thanks very much for any insight or opinions!

Chris Seveney · Answer

@Neil Seldomridge

0% chance. I have ownership stake in a servicing company and if a loan is performing the lender never even cares or checks the notes. As someone who invests in notes of a borrower ordered a bpo I would think they would be trying to refinance.

Neil Seldomridge · Answer

Hi all, to follow up on this, it looks like the only stipulation in my loan doc is the one-year occupancy requirement, which we have satisfied.  So we should be good to proceed and hopefully get our $136/monthly PMI removed.

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Thank you all for the help!

Neil Seldomridge · Answer

Thanks, David and Bill.  I will review my loan documents and report back!

David M. · Answer

@Neil Seldomridge

Well...  Plenty of homeowners become landlords, either on purpose or accidently.  I've never heard of anything that says for a conforming loan (conventional, FHA, VA, etc.) that you can't rent out your property after the 1year owner-occupation requirement....

Bill B. · Answer

99.9% of the loans you sign a document saying you will live there for a year or you’ve committed mortgage fraud. After a year 99.9% don’t care what you do with it as long as you make the payments, pay the taxes, and keep it insured.

David M. · Answer

@Neil Seldomridge

Under what "clause" would the servicer call the loan?  I assume that you are moving out and intent to rent out the property.  If your loan has a clause that prevents you from using it as a rental, a lot of people would be in trouble.  Remember, you/the loan are only underwritten once.  For example, some people think if they lose their job sometime after purchasing the property that they no longer "qualify for their current loan."  Nope...  Its not running/periodically qualification period.

Make any sense?  Or, what am I missing?

Heath Thomas Jr · Answer

It depends if the broker will actually go in the house or just be able to do a drive-by. Did you get additional info on what the BPO would include?

Brett Miller · Answer

@Neil Seldomridge what kind of loan do you have (conventional, FHA, etc.)?  How long have you lived in the property?

Neil Seldomridge · Answer

Thanks, Chris.  Much appreciated!   In our case, our loan servicer offers a BPO as an alternative to an appraisal to determine value and ensure we have >20% equity.

P.S. The house is Fairfax, so probably not to far from you.

Can BPO lead to loan being called?

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