What's the reason banks ask if owner occupies the property or not?

Could be a couple of reasons. First, there are new rules with renters. So they may want to be following correct procedure. Second, if the house is vacant they want to know how it is being maintained.

They may also be more lenient toward a home owner vs a renter.

My guess is that the banks involved will require the renteres to pay them directly rather than the defaulting homeowner.

Quoting RE ShortSale:

On a short sale transaction, what is the reason the banks ask if the owners occupy the property or not? How does this affect their approval decision?

Also, if the homeowner's loan was FHA, owner occ is required for them to consider short sale.

Jennie Blackburn, Redington Beach FL

Quoting Destin Realtor:

My guess is that the banks involved will require the renteres to pay them directly rather than the defaulting homeowner.

If this is a short sale the bank will never "own" the property. It will go straight to the new buyer. Bank will have no right to rents under normal circumstances.

Actually, I was speaking of the REOs and bank foreclosures and not the short sales. You are right. On short sales they want to know for tenancy rights law and to find out how hard it will be to get the tenant out of the home during transition of title.

This is asked to see what they may have to do if sellers are there or not. 1) If owners are still in house, are they planning on getting them to leave?

2) If empty, depening mostly of the area, they want to secure the place to make sure others can not get in.

3) Believe this or not, I have a client that has been in their home ever since they were giving their NOD. This coming Jan. 2010, will be 2.5 years that my clients have lived rent free in a beautiful 3/bed, 3/fullbaths townhouse in San Juan Capistrano.

4) I have submitted one offer in the very beginning for $400,000 and of course it took 8 months to get a reply to submit another offer because this one was too high. We then submitted another offer for $300K, and they took too long for my buyers. Now I have an new contract in place for $250K. What is holding up all the sales in the past is that the owners have stopped paying HOA, and the lien is about $11K. The buyers offered to pay this, but the bank said "NO."

Guys and ladies, talk to me, what is it going to take to get this property sold?

J. "Ronnie" Williams

Lenders inquire about the home being occupied in order to secure the property, change the locks, if the home is vacant in order to protect the asset. It also gives them a heads up if they have to start an eviction notice down the road. They want to know if the homeowners can be reached at that address in the event they need to send any legal papers.

Quoting Sidney Jimenez, CDPE:

Lenders inquire about the home being occupied in order to secure the property, change the locks, if the home is vacant in order to protect the asset. It also gives them a heads up if they have to start an eviction notice down the road. They want to know if the homeowners can be reached at that address in the event they need to send any legal papers.

As mentioned before this is not an REO, it is a shortsale situation. They have no right to secure a property unless it is abandoned. Vacant ain't good enough. Just ask some of the wannabe REO agents who jumped the gun and got themselves sued.

Be careful on this issue.

Totally believable! Wow, how nice for your clients really to live there totally free for so long. Are they still working? Counteroffer the HOA amount? Offer to have payments set up at 0% interest over a certain number of years? I am still confused because in Florida the most they can recover on past due HOA fees is 6 months or 1% of the remaining mortgage whichever is greater.

Good luck selling the home. Sounds like you may have to give it away. I cannot believe that they won't let the buyers pay off the lien. Why would that matter?

Kelly