The Biggest Battle: My primary residence

[Christos Philippou]

Flash back about 7-8 months ago when I am finally ready to get a loan for my first primary residence. I am currently renting an apartment, but I have purchased and renovated two buy-and-hold investment properties in the past 8 months. It was finally time to get out on my own and get my own primary residence.

Flash forward, I am working with X lender (not sure I want to put them on blast too hard). They are asking all this crazy stuff, making me bend over backwards to get this loan. I understand they do that. BUT, it's maybe 10 days to closing, I am in Europe enjoying my honeymoon, and they tell me they won't give me a loan. They said because I have 2 investment properties and now I am trying to buy my own home to live in with my family, they won't do it. So they make me write up a LOE for this, saying it should do it, it should work for the UW. A few days later, nope. Not going to work. They found: posts on an investing forum online. They trolled the internet to see posts like these, learning about real estate. 

So I ditched them and went with my realtor's recommendation: Wells Fargo. They closed the loan in a little under 4 weeks. They couldn't care less I had 2 investment properties and now ready for my own. They were extremely friendly, personable, and were extremely happy to see me into my first home. 

Odd success story here, I know. But it's time to get moving out. Fresh paint goes on tomorrow, some recessed lights in the living room, etc. I can now focus on future investment property deals with peace of mind in my own new home haha.

If you care to know who the original lender was, shoot me a message and I will tell you. It's a pretty big bank. 

[Chris Mason]

Grats on your home @Christos Philippou.

For context, occupancy fraud is the most common type of mortgage fraud.

You're focused on the institutions in your post, but I'd argue in this case it's more about the folks you are working with. I picked up a deal from a fellow loan officer at the exact same firm that I worked at at the time, packaged it my way, sent it back to the exact same underwriter, and it closed just fine after sitting in limbo and doing the back and forth game for weeks prior to re-packaging. 

Because underwriters are sensitive to this most common type of mortgage fraud, loan officers need to include some information to sell it, such as...

a) Look at this proof that this person has always used investment property financing for investment properties. 

b) Look how this property is unlike their investment properties (unit count, neighborhood, etc).

c) Check out how this is closer to borrower A's work than where they are currently renting.

d) Take a look at this awesome yard. They want to get a dog, and now they can.

e) And so on.

In cases where there is no mortgage fraud, there 100% of the time are factors that differentiate this property from one that would make a good rental property. Just share that logic with underwriting, along with reasonable information backing it up as credible.