REO owner occupant bidding period enforced?

[Charles Borrelli]

This Question is about purchasing from Private Commercial Banks with cash. 

I want to be clear.NO purchases from government agencies and Cash Purchase Only . This question is About cash REO purchases from a private bank.

OK the Question

I see a number of banks these days listing REO properties with owner occupant bidding periods and selling, Most of these properties are not even habitable and say that the buyer must agree make the property their primary residence as soon as possible. I know investors are buying these in the owner occupant period. I have yet to see any law that says they have to follow this agreement. Assuming there is no deed restriction how could the bank even enforce these vague agreements? If the buyer flipped or rented the house within a year I suppose the bank could sue but what damage would they sue for since they were paid in full. I suspect these periods are just for PR?

[Ray Johnson]

@Charles Borrelli I can't recall if I've seen a post from you regarding REO's or not so I'll reiterate what I've told a few people on this subject. I buy the REO's during this owner occupant period, but I move into them for the required timeframe as my primary residence. @Manolo D. @Michael Plante have both touched on the thing you may not be aware of, Every REO that I've purchased during the OO period will have the following requirements as a part of the sales package regardless of how you pay for the property, cash or financing. 1) You will be required to sign a sworn affidavit stating you will be using the property as your primary residence. 2) You will have to sign the affidavit stating you agree to be moved into the property within 60 days of the closing settlement date. 3) You will sign stating you will not sell or rent the property before the one year point from the settlement date. At the bottom of the affidavit it states if you violate any the aforementioned things you're committing mortgage fraud and will be federally prosecuted if it is determined you violated these terms. There are federal Hotlines for people to report possible fraud by investors in this arena. I've bought several REO's as OO, but I've only been aware of someone checking on me after the purchase once, It may have been more but once was obvious. Luckily I'm not dumb or a gambler who'll risk committing a Felony just to get a property so I was ok when the woman showed up at my property. If you really want the property just move into the property before the 60 days and do your 10 months in the property then sell or rent it at the 12 month period, this is what I do and it isn't that complicated.