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J. Warren
J. Warren, Lawyer
Category: Real Estate Law
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Experience:  Experience in residential real estate and commercial leases.
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We purchased a second home in June (with a second home rider

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We purchased a second home in June (with a second home rider attached) and recently made it our primary residence and sold our previous home. I plan to advise the mortgage company of our change of mailing address. Do I need to be concerned about the potential for the mortgage company calling the loan? Circumstances change and we changed our minds after we bought the house and decided to move in permanently.
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
Relist: I prefer a second opinion.
Expert:  J. Warren replied 1 year ago.
Hello! My name is XXXXX XXXXX I look forward to helping and providing information to you today.

I appreciate your concerns about your situation. Legally if the rider prevents you from converting the home to your primary the lender could accelerate the loan. Typically this is to prevent a homeowner from renting one of the two houses owned. However, even though the lender may have a legal right the reality is they do not accelerate loans on the second home rider covenant.

You have a change in circumstances, you now only own one of the homes you are not using a favorable interest rate to hold an investment/rental company and you are making your payments on time. You are obligated to provide them updated mailing information. If for some reason they attempt to accelerate you can either refinance or retain a local attorney to fight it.

Hope this helps and you find it consistent with the first opinion you received. Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. If for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns.

All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.

Customer: replied 1 year ago.

Thanks for your response. Everything you said in the "changed circumstances" paragraph is right on. We now only have one home (the "second" home) and it's our primary residence (we sold our previous home). I would think the bank would view it favorably, given we're now in the home 100% and caring for it every day as opposed to it being a vacation home which was the original intent.


Here are a few follow up questions that I'd like your thoughts on:


 


1) what might trigger an inquiry by the mortgage company when I submit my change of address? I would think it seems like it should be a simple servicing task for them.


2) is it worth asking the mortgage company to remove the second home rider as it's now our primary home? Do I risk opening a can of worms if I do?


3) how would the mortgage company claim fraud if it all comes down to my intent at closing? Who is to say we didn't change our minds the next day? Seems pretty hard to prove on their part

Expert:  J. Warren replied 1 year ago.

Thank you for the follow up.


1) what might trigger an inquiry by the mortgage company when I submit my change of address? I would think it seems like it should be a simple servicing task for them. Most likely its just an administrative duty for them and not something that will likely invoke some investigation into what is going on. If you have online access to the account it typically address information can be changed there.


2) is it worth asking the mortgage company to remove the second home rider as it's now our primary home? Do I risk opening a can of worms if I do? You would want to review the detailed language in the second home rider covenant as to what would be considered an issue with moving. Determine if moving due to change in circumstances such as job, family, etc. would be excepted, but really you have already opened a can of worms if there were any to open by moving and selling the other house. Lenders are not looking to default folks and to make trouble as having a good borrower is harder to fine these days.


3) how would the mortgage company claim fraud if it all comes down to my intent at closing? Who is to say we didn't change our minds the next day? Seems pretty hard to prove on their part. Fraud is difficult to prove and as long as they are getting paid there is no advantage for them to incur expense and time looking for something that would be almost impossible to prove.

 

Hope this helps.

J. Warren, Lawyer
Category: Real Estate Law
Satisfied Customers: 1349
Experience: Experience in residential real estate and commercial leases.
J. Warren and 6 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.


Thanks much for the insight. Take care.

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J. Warren
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Experience in residential real estate and commercial leases.