The David Greene Show – Episode 94

Mortgage Monday | How to Avoid Mortgage Fraud
Release Date: November 3, 2025
Host: David Greene
Guest: Christian (the "dashing Christian bachelor")

Episode Overview

This Mortgage Monday episode zeroes in on the critical topic of mortgage fraud—what it is, what it isn’t, how people get in trouble, and how to stay compliant. David and Christian unpack real-life stories, clarify common myths, and offer straightforward advice aimed at protecting everyday buyers, investors, and aspiring homeowners from costly legal mistakes in an increasingly regulated mortgage landscape.

Main Discussion Points & Insights

1. Common Misconceptions about Mortgage Fraud

[00:13–02:25]

Many believe it’s always illegal to buy a primary residence and later move out; in reality, the requirement is simple: you must intend to occupy the property for at least a year, and life circumstances can affect this.
Primary residence intent:
- Within 60 days of closing, you must move in and plan to stay for 12 months.
- Life changes (job relocations, family emergencies, etc.) are valid exceptions, but “moving down the street” usually isn’t.
Mythbusting:
- “You’re not legally stuck forever—just honor the one-year rule, unless you have major, believable reasons.”

Quote:

"You're not supposed to be able to primary buy a primary every month. Like, there are strict rules in place to avoid against that. [...] We preach the one house a year strategy that means you can buy a house every year because after 12 months you have fulfilled your primary residence obligation."
— Christian [01:20]

2. Valid and Invalid Exceptions

[02:47–05:47]

Acceptable reasons to move out early: Military deployment, job relocation, death or illness in the family.
Underwriters look for logical, justified moves; attempts to game the system (like moving from a luxury home to a humble triplex in an entirely different market) are flagged.
Always consult your lender before making nonstandard moves or assumptions.

Quote:

"Ultimately, I can't give you a cheat sheet here. Talk to your lender. If you are considering having to move out prior to your 12 months, or if you're trying to strategize what is allowed, you should talk to your lender before making any hasty decisions."
— Christian [05:44]

3. Other Forms of Mortgage Fraud

[06:49–10:19]

Occupancy Fraud: Most common—claiming you will live in a property as a primary when it’s actually a rental.
DSCR Loans Misuse: Some buyers use these loans intended for rental properties (with higher rates and no personal occupancy) and then move in themselves.
Debt Non-disclosure: Failing to inform lenders about personal loans funding your down payment.
Questionable Transfer Techniques: Such as “subject to” deals that may be legal for FHA/VA but not for conventional loans.
Leaseback Scams: People buy as a primary and immediately put the property up for rent; this is a clear red flag for lenders.
Lenders do actually monitor post-closing activity—drive-bys, utility checks, and now, AI-driven fraud detection.

Quotes:

"If the first piece of advice is withhold information from your lender, it's probably questionable. Questionably legal at best."
— Christian [08:26]

"Guys, for the love of God, do not do that, please. It is very bad for your lender. Very bad. That becomes an unsellable loan. It's bad for you because you can technically get, like, blacklisted and not get a loan to get you again."
— Christian [09:28]

4. Lender Oversight and Technology

[10:19–11:55]

Lenders increasingly utilize technology, even AI, to spot occupancy fraud, such as cross-referencing utility bills and monitoring post-closing occupancy.
AI services can now alert lenders if a property is vacant or not owner-occupied as promised, often bypassing direct human investigation.

Quote:

"If they call your cable company and your primary residence cable bill is in somebody else's name, that's a red flag, right? ... If you're a brand new home buyer, like the cable bill is going to be in your name. It's pretty clear."
— Christian [11:15]

5. House Hacking, Room Rentals, and Short-Term Rentals

[12:39–14:54]

Room rentals: Legal within lending guidelines for primaries (check local/HOA rules).
Short-term rentals (STRs): Enforcement varies; it's common for owners to skirt local bans, though lending programs may not restrict STRs.
Primary-to-Investment Moves: After fulfilling one-year occupancy on a primary loan, renting it out is allowed.
Investment-to-Primary: Generally permitted (for conventional loans), but not with DSCR products.
Lenders focus heavily on intent and compliance with loan type requirements, especially regarding down payments and rates.

6. The Importance of Honesty and Competent Advice

[14:54–16:32]

Always be up front with your lender.
Not all loan officers are equally competent; some may inadvertently or intentionally guide you into mortgage fraud.
Do not rely on advice simply because someone is in a position of authority (even lenders or lawyers can be wrong or self-serving).

Quotes:

"Your lender could walk you into mortgage fraud."
— Christian [16:32]

"It's kind of like having a lawyer that's dumb. You could have a lawyer that still gives you bad legal advice. ... You could potentially get in trouble."
— David [16:10]

7. Case Study: Letitia James and the Second Home Rider Incident

[16:38–31:07]

Explains how the New York Attorney General, Letitia James, was charged with mortgage fraud for declaring a property as a second home but letting her niece live there rent-free, while also declaring it as a rental property on her taxes.
The discussion clarifies definitions:
- Primary residence: Occupied more than 50% of the year.
- Second home: Must occupy at least 14 days/year and less than half the year.
- Second-home loans: 10% down, lower rates than investment properties, but not as low as primaries.
- Second homes cannot have a professional property manager or full-year lease, as that cedes occupancy control.
- Renting via Airbnb is currently allowable as long as owner occupancy rules are met.
The case’s public profile highlights how even small infractions (saving $19k over a 30-year loan!) can become major legal exposures, especially under scrutiny.

Quotes:

"Sometimes you can have the best of intentions and even be unaware... I think I can safely assume that Leticia James’s loan officer probably did not say, what are you going to use the property for? Did not explain the form, did not say, ‘Hey, you're the Attorney General. Maybe we mind our P’s and Q’s on this a little bit.’"
— David [30:17]

8. Key Takeaways and Final Advice

[31:42–32:38]

After a year of occupancy, renting out your primary residence is allowed.
Do NOT try to “game” DSCR or second home loans—occupancy rules are clear and monitored.
If you’re uncertain, ask your (reputable) lender and do not rely solely on advice from interested parties.
Both honest errors and intentional fraud can have severe consequences—legal, financial, and career-related.

Quotes:

"If you don't want to commit mortgage fraud, you should follow me on Instagram and send me a message. ... If you do want to commit mortgage fraud, leave me alone."
— Christian [32:14]

Notable Quotes & Memorable Moments

On Lenders Getting Burned:
"That becomes an unsellable loan. It's bad for you because you can technically get, like, blacklisted and not get a loan to get you again." — Christian [09:28]
On Second Homes & Airbnb:
"The wording for the rule was created before Airbnbs were popular... I have never had somebody get in trouble for this. The only people who've gotten in trouble for second homes is you close and you have somebody sign a 12 month lease." — Christian [22:50]
On Legal Advice:
"Your lender could walk you into mortgage fraud." — Christian [16:32]

Key Timestamps

Primary Residence Rule Explained: [00:13–02:25]
Exceptions to Occupancy Requirement: [02:47–05:47]
Mortgage Fraud Examples: [06:49–10:19]
Monitoring for Fraud/Use of AI: [10:19–11:55]
House Hacking & STRs: [12:39–14:54]
Why Honest Communication Matters: [14:54–16:32]
Letitia James Case Analysis: [16:38–31:07]
Wrap-Up/Final Advice: [31:42–32:38]

Style & Tone

Conversational, humorous, and sometimes irreverent, with lots of real-life anecdotes. David presses for clarity on legal boundaries while Christian brings technical depth, practical examples, and a touch of snark, especially when denouncing mortgage fraud shenanigans.

For Listeners: What Should You Do?

Only take out a primary residence loan if you truly intend to live there for a year.
Don’t fudge occupancy on DSCR or second home loans.
Always disclose your sources of down payment funds.
Talk—honestly—to your lender, but make sure your lender knows what they're doing.
If in doubt, refer back to experts like Christian and David, who read the fine print so you don’t have to.

Want more mortgage mythbusting or need a tailored strategy? Reach out to Christian via @heonebroker or learn more at theonebrokerage.com.

The David Greene Show – Episode 94

Mortgage Monday | How to Avoid Mortgage Fraud
Release Date: November 3, 2025
Host: David Greene
Guest: Christian (the "dashing Christian bachelor")

Episode Overview

Main Discussion Points & Insights

1. Common Misconceptions about Mortgage Fraud

[00:13–02:25]

Many believe it’s always illegal to buy a primary residence and later move out; in reality, the requirement is simple: you must intend to occupy the property for at least a year, and life circumstances can affect this.
Primary residence intent:
- Within 60 days of closing, you must move in and plan to stay for 12 months.
- Life changes (job relocations, family emergencies, etc.) are valid exceptions, but “moving down the street” usually isn’t.
Mythbusting:
- “You’re not legally stuck forever—just honor the one-year rule, unless you have major, believable reasons.”

Quote:

"You're not supposed to be able to primary buy a primary every month. Like, there are strict rules in place to avoid against that. [...] We preach the one house a year strategy that means you can buy a house every year because after 12 months you have fulfilled your primary residence obligation."
— Christian [01:20]

2. Valid and Invalid Exceptions

[02:47–05:47]

Acceptable reasons to move out early: Military deployment, job relocation, death or illness in the family.
Underwriters look for logical, justified moves; attempts to game the system (like moving from a luxury home to a humble triplex in an entirely different market) are flagged.
Always consult your lender before making nonstandard moves or assumptions.

Quote:

"Ultimately, I can't give you a cheat sheet here. Talk to your lender. If you are considering having to move out prior to your 12 months, or if you're trying to strategize what is allowed, you should talk to your lender before making any hasty decisions."
— Christian [05:44]

3. Other Forms of Mortgage Fraud

[06:49–10:19]

Occupancy Fraud: Most common—claiming you will live in a property as a primary when it’s actually a rental.
DSCR Loans Misuse: Some buyers use these loans intended for rental properties (with higher rates and no personal occupancy) and then move in themselves.
Debt Non-disclosure: Failing to inform lenders about personal loans funding your down payment.
Questionable Transfer Techniques: Such as “subject to” deals that may be legal for FHA/VA but not for conventional loans.
Leaseback Scams: People buy as a primary and immediately put the property up for rent; this is a clear red flag for lenders.
Lenders do actually monitor post-closing activity—drive-bys, utility checks, and now, AI-driven fraud detection.

Quotes:

"If the first piece of advice is withhold information from your lender, it's probably questionable. Questionably legal at best."
— Christian [08:26]

"Guys, for the love of God, do not do that, please. It is very bad for your lender. Very bad. That becomes an unsellable loan. It's bad for you because you can technically get, like, blacklisted and not get a loan to get you again."
— Christian [09:28]

4. Lender Oversight and Technology

[10:19–11:55]

Lenders increasingly utilize technology, even AI, to spot occupancy fraud, such as cross-referencing utility bills and monitoring post-closing occupancy.
AI services can now alert lenders if a property is vacant or not owner-occupied as promised, often bypassing direct human investigation.

Quote:

"If they call your cable company and your primary residence cable bill is in somebody else's name, that's a red flag, right? ... If you're a brand new home buyer, like the cable bill is going to be in your name. It's pretty clear."
— Christian [11:15]

5. House Hacking, Room Rentals, and Short-Term Rentals

[12:39–14:54]

Room rentals: Legal within lending guidelines for primaries (check local/HOA rules).
Short-term rentals (STRs): Enforcement varies; it's common for owners to skirt local bans, though lending programs may not restrict STRs.
Primary-to-Investment Moves: After fulfilling one-year occupancy on a primary loan, renting it out is allowed.
Investment-to-Primary: Generally permitted (for conventional loans), but not with DSCR products.
Lenders focus heavily on intent and compliance with loan type requirements, especially regarding down payments and rates.

6. The Importance of Honesty and Competent Advice

[14:54–16:32]

Always be up front with your lender.
Not all loan officers are equally competent; some may inadvertently or intentionally guide you into mortgage fraud.
Do not rely on advice simply because someone is in a position of authority (even lenders or lawyers can be wrong or self-serving).

Quotes:

"Your lender could walk you into mortgage fraud."
— Christian [16:32]

"It's kind of like having a lawyer that's dumb. You could have a lawyer that still gives you bad legal advice. ... You could potentially get in trouble."
— David [16:10]

7. Case Study: Letitia James and the Second Home Rider Incident

[16:38–31:07]

Explains how the New York Attorney General, Letitia James, was charged with mortgage fraud for declaring a property as a second home but letting her niece live there rent-free, while also declaring it as a rental property on her taxes.
The discussion clarifies definitions:
- Primary residence: Occupied more than 50% of the year.
- Second home: Must occupy at least 14 days/year and less than half the year.
- Second-home loans: 10% down, lower rates than investment properties, but not as low as primaries.
- Second homes cannot have a professional property manager or full-year lease, as that cedes occupancy control.
- Renting via Airbnb is currently allowable as long as owner occupancy rules are met.
The case’s public profile highlights how even small infractions (saving $19k over a 30-year loan!) can become major legal exposures, especially under scrutiny.

Quotes:

"Sometimes you can have the best of intentions and even be unaware... I think I can safely assume that Leticia James’s loan officer probably did not say, what are you going to use the property for? Did not explain the form, did not say, ‘Hey, you're the Attorney General. Maybe we mind our P’s and Q’s on this a little bit.’"
— David [30:17]

8. Key Takeaways and Final Advice

[31:42–32:38]

After a year of occupancy, renting out your primary residence is allowed.
Do NOT try to “game” DSCR or second home loans—occupancy rules are clear and monitored.
If you’re uncertain, ask your (reputable) lender and do not rely solely on advice from interested parties.
Both honest errors and intentional fraud can have severe consequences—legal, financial, and career-related.

Quotes:

"If you don't want to commit mortgage fraud, you should follow me on Instagram and send me a message. ... If you do want to commit mortgage fraud, leave me alone."
— Christian [32:14]

Notable Quotes & Memorable Moments

On Lenders Getting Burned:
"That becomes an unsellable loan. It's bad for you because you can technically get, like, blacklisted and not get a loan to get you again." — Christian [09:28]
On Second Homes & Airbnb:
"The wording for the rule was created before Airbnbs were popular... I have never had somebody get in trouble for this. The only people who've gotten in trouble for second homes is you close and you have somebody sign a 12 month lease." — Christian [22:50]
On Legal Advice:
"Your lender could walk you into mortgage fraud." — Christian [16:32]

Key Timestamps

Primary Residence Rule Explained: [00:13–02:25]
Exceptions to Occupancy Requirement: [02:47–05:47]
Mortgage Fraud Examples: [06:49–10:19]
Monitoring for Fraud/Use of AI: [10:19–11:55]
House Hacking & STRs: [12:39–14:54]
Why Honest Communication Matters: [14:54–16:32]
Letitia James Case Analysis: [16:38–31:07]
Wrap-Up/Final Advice: [31:42–32:38]

Style & Tone

For Listeners: What Should You Do?

Only take out a primary residence loan if you truly intend to live there for a year.
Don’t fudge occupancy on DSCR or second home loans.
Always disclose your sources of down payment funds.
Talk—honestly—to your lender, but make sure your lender knows what they're doing.
If in doubt, refer back to experts like Christian and David, who read the fine print so you don’t have to.

Want more mortgage mythbusting or need a tailored strategy? Reach out to Christian via @heonebroker or learn more at theonebrokerage.com.

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Mortgage Monday | How to Avoid Mortgage Fraud | Episode 94

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Summary

The David Greene Show – Episode 94

Episode Overview

Main Discussion Points & Insights

1. Common Misconceptions about Mortgage Fraud

2. Valid and Invalid Exceptions

3. Other Forms of Mortgage Fraud

4. Lender Oversight and Technology

5. House Hacking, Room Rentals, and Short-Term Rentals

6. The Importance of Honesty and Competent Advice

7. Case Study: Letitia James and the Second Home Rider Incident

8. Key Takeaways and Final Advice

Notable Quotes & Memorable Moments

Key Timestamps

Style & Tone

For Listeners: What Should You Do?

Summary

The David Greene Show – Episode 94

Episode Overview

Main Discussion Points & Insights

1. Common Misconceptions about Mortgage Fraud

2. Valid and Invalid Exceptions

3. Other Forms of Mortgage Fraud

4. Lender Oversight and Technology

5. House Hacking, Room Rentals, and Short-Term Rentals

6. The Importance of Honesty and Competent Advice

7. Case Study: Letitia James and the Second Home Rider Incident

8. Key Takeaways and Final Advice

Notable Quotes & Memorable Moments

Key Timestamps

Style & Tone

For Listeners: What Should You Do?