We have seen an increase in purchase loans (usually)being made to LLC's, which started out as loans to individuals.

Is this a common practice? To me it throws up red flags when the switch occurs last minute, but i wanted to hear thoughts from other sources.

Most of the time these are non-owner occupied rental units and the borrowers are putting them in an LLC in an attempt to limit their liability to the equity in the home in case of lawsuit and shield their personal assets.

That is what causes me to question the reasoning of our borrower(s) because this loan is to purchase their primary residence.