“Single Family” Residence

[sdsystech]

Have a question for the knowledgable people on the board. A trend seen the SD area, particularly north county, are “single-family” homes were in fact many families occupy a single residence and pool their money to make the monthy mortgage payment. An example of this arragement at its extreme may involve people actually using a garage as a bedroom. Needless to say this type of arragement has quality of life implications for not only the residents of the home in question, but also the neighbors and their property value.

A have several querstions regarding this:

1) Does this type of arrangement have to be disclosed to the lender (that the person signing the loan documents is unable to afford the monthy payment and relies on the contributions of several other sources)?
2) If the loan officer is aware of this type of arrangement yet conceals it by omission, etc, have they violated the law and/or an ethical code?
3) If a home is zoned a “Single-Family residence” does this type of arrangement violate city code? (At the minimum it seems a fire hazard for the occupants)

Thanks

[HLS]

1) Buyer(s) need to qualify for the loan. It is not necessary to disclose who will be living there. It’s either owner occupied or it’s not.

2)Who do they omit telling it to ? It’s not asked. No specific law or ethical code exists

3)YES, THAT is a violation and can be reported to city/county.

If borrower qualifies for the loan, they can purchase the house. It does NOT give them the right to do anything illegal.

Borrowers using stated income loans still need to qualify. If the person signing needs that extra income, they won’t disclose it. They WILL have to have a decent credit score to get financing without a healthy down payment. If they have no down, they won’t get the loan going stated, it will have to be full doc, which means that if they get the loan, they DO qualify.

[HLS]

1) Buyer(s) need to qualify for the loan. It is not necessary to disclose who will be living there. It’s either owner occupied or it’s not.

2)Who do they omit telling it to ? It’s not asked. No specific law or ethical code exists

3)YES, THAT is a violation and can be reported to city/county.

If borrower qualifies for the loan, they can purchase the house. It does NOT give them the right to do anything illegal.

Borrowers using stated income loans still need to qualify. If the person signing needs that extra income, they won’t disclose it. They WILL have to have a decent credit score to get financing without a healthy down payment. If they have no down, they won’t get the loan going stated, it will have to be full doc, which means that if they get the loan, they DO qualify.

[NotCranky]

3) If a home is zoned a “Single-Family residence” does this type of arrangement violate city code? (At the minimum it seems a fire hazard for the occupants)
Some code compliance offices do not allow anonymous complaints. So in case you are considering complaining check it out.
The code compliance officer is not supposed to say anything. I have met people who have said the code compliance people let the cat out of the bag. If code compliance shows up, don’t take it for granted that things will change much.
Be careful.

[NotCranky]

3) If a home is zoned a “Single-Family residence” does this type of arrangement violate city code? (At the minimum it seems a fire hazard for the occupants)
Some code compliance offices do not allow anonymous complaints. So in case you are considering complaining check it out.
The code compliance officer is not supposed to say anything. I have met people who have said the code compliance people let the cat out of the bag. If code compliance shows up, don’t take it for granted that things will change much.
Be careful.

[Author]

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