"The standard Fannie Mae mortgage provides that the borrower must move in within 60 days, that the home must be their primary residence, and that they live there for a year unless extenuating circumstances exist which are beyond Borrower's control. That extenuating circumstances clause is weighty. When special investigations units do their job, they look for these extenuating circumstances. If they exist, the borrower's non-occupancy is excused."
"Long ago I was a loan officer in Southern California and originated an owner-occupied loan to a young couple in Riverside. The escrow closed on Wednesday, and on Friday, the wife jumped from a freeway overpass into the windscreen of an oncoming semi. The death certificate listed the time between injury and death as simultaneous. The borrower/widower moved back to family in Michigan and never moved into the subject property."
Occupancy fraud moved from obscurity to prominent scrutiny in 2024–2025, prompting intensified investigations. The standard Fannie Mae mortgage requires borrowers to move in within 60 days, designate the property as their primary residence, and occupy it for one year unless extenuating circumstances beyond the borrower’s control exist. Special investigations units evaluate claims of extenuating circumstances and seek supporting documentation. When valid circumstances such as death, hospitalization, employer relocation, or other unforeseen events are documented, non-occupancy is excused. Investigators validate evidence like death certificates to resolve lender concerns and determine whether occupancy violations occurred.
Read at www.housingwire.com
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