There have been several articles in the press recently on the subject of owner-occupancy. The focus here in Arizona is on the fact that owner occupants receive a small break on their property taxes, and many folks are receiving that benefit even though they do not live in the property. With the huge increase in prices over the last year, Arizona real estate has attracted many investors. Many have not been truthful.
However, while the state suffers the loss of revenue from reduced taxes, there is a much more serious aspect to this situation. Oh, and by the way, it's a felony.
When investors, usually with a "co-operative" lender, falsely claim that they will occupy the property, that is a felony and as such will be prosecuted by the FBI. That's because they are misleading the lender to get better terms on their loan i.e. lower interest rate and lower downpayment. Also, the risk of default is much greater when an investor buys a property.
Regrettably, there are many unscrupulous Realtors and lenders who will help you commit this crime, in order to line their own pockets. Remember, in a downturn, when banks are forced to take back defaulted properties, they will investigate. Indeed, there have been successful prosecutions even when the Lender incurred no loss at all.
Think about it!
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