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Renting out property without mortgage holder's consent
Posted on 6/27/14 at 2:10 pm
Posted on 6/27/14 at 2:10 pm
I guess this is the right board for this. Need some advice.
here's my situation,
I have had my house on the market for 8 or 9 months and had no offers. I needed it gone by the end of July so I inquired about renting it out as I have an interested couple. During my information gathering I called my mortgage holder, Wells Fargo, and was told I was allowed to rent it out i would just have to fill out a form which would take a couple of weeks to come in. So with what seemed to be permission I went ahead and got everything lined up and only need to get the paperwork to complete agreement. i have the couple ready to move in at the end of july, even delisted my property from real estate agency. Well today I get the paperwork in but it's just a one page notice saying i'm not allowed to rent it out. I call them and they say sorry about that but you are prohibited. This backs me into a corner and screws me over.
I normally wouldn't condone breaking the law but seeing as they screwed me over, how likely is it to be found out by the mortgage lender that you are renting it out? is it worth the risk and what are the repercussions? i'm in a bine here.
sorry for the long post and TIA
here's my situation,
I have had my house on the market for 8 or 9 months and had no offers. I needed it gone by the end of July so I inquired about renting it out as I have an interested couple. During my information gathering I called my mortgage holder, Wells Fargo, and was told I was allowed to rent it out i would just have to fill out a form which would take a couple of weeks to come in. So with what seemed to be permission I went ahead and got everything lined up and only need to get the paperwork to complete agreement. i have the couple ready to move in at the end of july, even delisted my property from real estate agency. Well today I get the paperwork in but it's just a one page notice saying i'm not allowed to rent it out. I call them and they say sorry about that but you are prohibited. This backs me into a corner and screws me over.
I normally wouldn't condone breaking the law but seeing as they screwed me over, how likely is it to be found out by the mortgage lender that you are renting it out? is it worth the risk and what are the repercussions? i'm in a bine here.
sorry for the long post and TIA
5
Posted on 6/27/14 at 2:24 pm to Fearthehat0307
shite, I wasn't even aware the mortgage holder could keep you from renting. Well, "could" is a wrong word, I just didn't think it was prevalent. Sort of like how I've never run into a loan that had a prepayment penalty.
Going to have to look into that.
Going to have to look into that.
This post was edited on 6/27/14 at 2:26 pm
Posted on 6/27/14 at 2:27 pm to Fearthehat0307
That's crazy. I would just rent it out. Although I don't know what would happen if they found out.
Posted on 6/27/14 at 2:30 pm to Fearthehat0307
Damn. Did you agree to that in your mortgage? If so, was it some special kind of loan program or something?
Posted on 6/27/14 at 2:34 pm to Fearthehat0307
What kind of a loan did you have? There are certain loans out there - mainly ones that involved bond financing programs (like those low income programs that have a forgiveable second) that require owner-occupancy. If the owner no longer lives in the home, it would violate the mortgage covenants.
Assuming that there really is some sort of covenant, are you in a posistion to re-fi into a new mortgage without that covenant?
Also, FHA loans have a one-year owner occupant requirement, I believe.
Assuming that there really is some sort of covenant, are you in a posistion to re-fi into a new mortgage without that covenant?
Also, FHA loans have a one-year owner occupant requirement, I believe.
This post was edited on 6/27/14 at 2:36 pm
Posted on 6/27/14 at 3:17 pm to Fearthehat0307
Why in the world would you volunteer that info to them?
If the house burns down, the insurance pays off the mortgage company first anyway.
They aren't the law. The absolute worst they could do is call in the loan and you would have to redo they another lender. Trust me, as long as Wells is getting paid, they aren't paying attention to your individual little mortgage.
Rent it!
If the house burns down, the insurance pays off the mortgage company first anyway.
They aren't the law. The absolute worst they could do is call in the loan and you would have to redo they another lender. Trust me, as long as Wells is getting paid, they aren't paying attention to your individual little mortgage.
Rent it!
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