Jon is totally right, I have to look it up but I think it reads that you INTEND to occupy the property.Sometimes your intentions change and with the economy the way if your intention was to live there when you got the loan and you got a job in a diffrent state then your intention has to change and the bank will probably not call the loan.That being said once you change your mailing address with BOA to mail your statements to a new address this will probably kick up a red flag that you don't live there before the insurance ever reaches them.We had a borrower we gave a loan, we found out less than a month later that the borrower had changed his mailing right after getting the loan which signals doesn't live in the property- they didnt call the loan.

I'm going to print it out in a very large bold font and tape it to my wife's forehead.

Major fixer but lots of potential here.  10 bedroom, 0 bath home, around 5,000 to 10,000 square feet.  The property has real limestone floors, 3 stories, a solid red-stone foundation, a very large pool and lots of room to expand.  Home would need to be brought up to local building codes.  Buyer to verify permits.Offered at $500,000, includes wholesaling fee.Rehab estimate: $35k, needs new electrical, plumbing, HVAC, roof, some walls, a few bathrooms, windows, some foundation issues, and all interior fixtures.

Yes a nationwide HML will usually be much higher as they are building the risk out.The local HML has a more intimate knowledge of the area,the laws,etc. so can cover risk and chance of default better on the loan.10 points is outrageous.I looked at rehabbing but I am not that hot on it because of the long hold times involved to an end buyer and all the residential BS red tape the government has enacted.The points aren't as bad if the interest rate is really low.If both are high there are too many HML's to pay those ridiculous rates.

When a service company tries so hard to remain anonymous, it raises serious red flags for me.

And so we did.They paid the last month rent, security deposit, and a non refundable pet fee.I can come up with a few things that are close to "red flags" but I am not sure if I am nitpicking or simply being a newbie.Anything that I can learn from this?

Also this property has changed hands and listings since Oct' 2010 which is a red flag to me that something else could be wrong with the property.

. :)Bryan as another commercial broker said to me.He has a stack of buyers.The ones looking for a needle in a hay stack go to the bottom of the list.My mantra is if I am going to look that long and hard for a deal like that then (I) will be buying it and realizing the returns.I think what happens with funds is that they are getting beat out by local investors willing to buy at a lower return.These local investors usually have decades of knowledge on the areas compared to the outside investors.They are comfortable paying more because of local knowledge whereas an out of county or state investor wants to price in the risk resulting in a lower offer.This is what I find with my listings.Investor A that is local will pay Y and then investor B comes in with a 20% lower offer because they don't know the area.Investor A wins out and closes the deal with more net to the seller or bank.A fund could partner with investor A to get the inside track on the area.This is what my developers would do to get a project pushed through.You use the locals that have the political ties.Nobody likes to see the big boys come in and push them around in their towns.Much easier using locals to cut through the red tape.

My attorney said for about every 1,000 transfers he's seen, a red flag was raised maybe 4 or 5 times and the lender dropped it after receiving a short letter of explanation from his office.

S and P isn't everything.There are 2 other agencies as well.If all 3 downgraded I think it would be more severe.They were saying that other countries that have experienced the down grade really saw no significant consequences from it.The problem with companies in the U.S is the cost does not pencil in.Many of the larger companies have massive upcoming retirements to pay out.Meanwhile many of these other countries businesses are fairly new.They can get low cost cheap labor and export to the United States and get credits from our government to do it.Meanwhile companies that start up here get burdened with bloated government,red tape,no credits,very high wages compared with overseas companies.When they say our companies go overseas for production it is not a shock to me.I instead say why in the world would they make a product here??