The first lender I spoke with when buying a house told me to lie on my application and tell the bank the unliveable property I cosigned on with my brother was my primary residence. She said it would be fine but it wasn't worth taking the risk so I walked. Same thing these folks did except if I had been caught I wouldn't have the $$ to pay fines. Turns out if you make a rule but don't enforce then the folks who can take advantage of your lack of enforcement will break the law.