Refi was for lower rate, yes.

Thank you for letting me know...I found your question interesting in that it does NOT mention occupancy as a default, but it does refer to the application process (Which is in-line with what the loan officer's emphasis was.)... In the interim I also found this clause:

Are you still having technical difficulties? It says you are now off-line...Should I open this question further to other experts?

I believe these loan officer's represent a group that will rapidly transfer the loan to a new group...Should I wait to request this letter from this new group, or should I press these people to offer me such a letter...if so, do I try to get the letter before the loan is funded?

Hello…I have a new question now. You may recall a few days ago, I closed on a loan that had a surprise for me: the Owner Occupancy requirement to be in the house for 1 year. Your advice was to request that the loan officer(s), who had assured me that it was a non-issue, provide in writing that I would not be held in default for non-occupancy. As I suspected, they did not wish to put that in writing; I didn’t think they would. As a result, my wife and I decided it was in our best interest to cancel this loan. Remember, it has always been our intent (intent being a key word I think!) to do the right thing. With that said, when we learned of the 1 yr occupancy requirement, we were not as ease and it had never been our intent to commit to something of that sort. Familiarity with (knowing the ins-and-outs of) these loans is obviously not our area of expertise, and apparently these clauses are well known. My question now comes, as a result of subsequent interaction with the loan officer. ..

After submitting my letter stating my desire to cancel the transaction, I received a call from the loan officer, who said I was “shooting myself in the foot,” that “he’s never seen anyone do this before,” that “the lender doesn’t care as long as you are paying and that they wont be investigating.” So I said, “well, lets just get that assurance in writing”…again they said that they won’t do that, as they will need to sell the loan later on. I said, so much more the reason to get these agreements/understandings in writing…of course, they could not, as it became more and more clear, that is not the nature of these loans. I said I couldn’t in good conscience continue with the transaction with the way the loan is written and (again) maintain our original intent to do things correctly. He started getting a little upset at this point and calling me a “by the book” type of guy and too conservative for my own good. I said, yes that is who I am, and the fact that he was saying I was doing things by the book implied that his assurances were not by the book - in essence, not appropriate and a risk.

Here’s where things began to change and the source of my concern and my question: His stance hereafter became the following…He started saying that "the loan is dead...it has been cancelled and that I have been declined"..."What?!" I asked....He said that “they were now declining my loan!” I said "But it is me who is cancelling." He said, “don’t’ worry: the deal is dead, but we could refinance as an income property, because that is what you have”...I said, "no, it is my primary residence...that is where I live"....He said, "you are being declined because it is an income property." I said, it is not...He asked: “Will you be there the whole year? I said, "this is actually the first time this question about timeframe has ever come up,…but no, I don't believe so...that is not our plan." He said "then for the loan, it is not a principal residence." He asked: “Are you going to sell?” I said: “Maybe now or Maybe rent – I don’t know”...He said "then it would be a Rental Property and, in fact we can't even refinance, because you don't have 25% equity...so we can't even consider that." I told him "I knew that, but I was concerned that he said they are declining the loan." He said that based on the fact that I will not be occupying a full year, then the loan will be declined...I said: "I had already been approved and the loan transaction is being cancelled by me...He reiterated and concluded the conversation saying, "the loan is cancelled."

My concern and question: It seemed like he was twisting the chain of events such that it sounds like THEY are declining ME...which makes me concerned that my excellent credit could be impacted by an incorrect entry in their database and subsequent reporting of this falsehood. His multiple reiterations that they were declining me made it sound like they were refusing my application. Can they do that?…my fear is that they claim it was a decline due to “misrepresentation” on the application or mortgage fraud, which is not correct. Again mortgage fraud is all about intent, as I have learned…and as I have said, it has NEVER been my intent to do the wrong thing. My only weakness, I suppose, has been relying on these guys for their professional advice in guiding me through the requirements and application process. Sooo, Am I just being paranoid, or should I be worried about my credit, or some other vulnerability of which I have not even considered??? Are there things I should be doing to protect myself or prevent any possible issues?

Relist: Other.
Mine is a follow up question several days later - My guess is that Andrea is not on-line at this time. Otherwise I am very satisfied with her help.

Before giving a "threat" of legal action, I did reach out in an email to ask if my credit score would be impacted...one of the two (not the one who had called me) replied in written email that "the credit score should not change since you cancelled. The only thing that would show would be a minor change for having run your credit reports for the loan." but this is normal. Is this written statement and acknowledgement sufficient to defend/protect me should they in fact report anything to the contrary to the bureaus?

I agree, my level of trust has been shattered, but perhaps I wasn't quite clear in my posting to you...You said "One minute they were friendly and in a split second, they were threatening to tell you that you were not only declined, but you had something to do with mortgage fraud." Yes and no...It's true that particular conversation was rather "agitated" mostly because I think the guy just learned I had cancelled (so no commission for him I suppose)...but he never threatened me with mortgage fraud...he never said that...the closest he came to such a statement was when he said "you are declined because you applied for a loan that is not your principal residence" (which is not true, except in the "new" definition requiring a year of occupancy) ...it was just My fear (or paranoia) that perhaps he might later, unbeknownst to me, report it as a decline for misrepresentation out of spite or to protect himself...just a paranoia because he kept using the term decline interchangeably with a "dead" loan...when I kept saying "Me: I cancelled it" he would reply "yes it's a dead loan...I cancelled it"...I didn't want to get into a semantics discussion because he didn't seem to be catching the nuance I was trying to assert...only later was I concerned that maybe he did in fact know the nuance and was purposely being obtuse.

Interesting...Just to be clear: the loan had already been approved, the papers were signed: but I cancelled within the allowable 3 days before funding, largely because I was NEVER provided the papers that I would sign and was literally discovering the fine print at the signing...the affidavit apparently has the standard language about occupancy, but it seemed like it said the lender couldn't refuse a request to not occupy the property...my subsequent research suggested this is not correct and that to do so would potentially constitute misrepresentation...so, I cancelled the signed loan, and to do so, I sent a letter registered mail already similar to what you propose here, EXCEPT I did NOT summarize any of my current situation or my intent. Is this information important to have stated (I suppose the importance is that it establishes my intent in writing, right?) Given the clarifications in this posting, is it a good idea to write them again? Since I have already submitted my cancellation and they have already reimbursed me, I'm not sure the pretext for me writing them again....And would a future letter be required to go in my file?

Ok very good advice. I do appreciate.