Real Estate And Lending - Not Committing Fraud
As I mentioned previously, leverage is important to any real estate investor which means more than likely you are getting a loan. As a lender I want to remind everyone that fraud is a criminal offense (that means you can go to jail) and lenders do not like to lose money.
They will come after you if you don’t pay your mortgage and there is fraud in your loan file. I consistently see honest law abiding citizens play way fast and loose with their loan application. Is it non-owner occupied or owner occupied or it is a second home these are clear distinctions to a lender.
If you’re speculating on new construction think hard and long on how you are structuring your financing. I have deals where I was flipping the property that takes sevens months to sell. If I declared it owner occupied on my application, I would be guilty of fraud.
Do you have the capital to carry a property for 6months to a year? Remember you’re gambling with the banks money (that is the concept of leverage) and if you are wrong and cannot make the payments they will investigate the loan file and if you have committed fraud they will prosecute. I know I would.
When the market is hot and lenders are giving out money left and right, people grow accustomed to “stretching the truth” as to income, usage etc… When the market takes a downward turn and lenders begin losing money, the lenders will be revisiting your file.
I hope this has been helpful. Feel free to contact me if you have any questions.
Glenn Wilbor is President and owner of California Equities, a nationwide Wholesale Mortgage Company that has had a presence in the downtown San Diego area for more than a decade.
Glenn and his company specialize in residential and commercial mortgage finance, real estate and development and have been instrumental in influencing the look of the San Diego skyline. For more information about California Equities, refinancing with Glenn or employment opportunities, please visit http://www.CaliforniaEquities.com or contact Glenn at glenn@californiaequities.com
Tags: glenn wilbor, mortgage refinancing, real estate investing
