What are FHA appraisers and what are their qualifications? I’d like to know what makes them special because….
…recently a lender I know coursed me to do a Streamline(k) renovation basically involving a new electric service and several minor improvements….no big deal right? When I got there I found a partially dismantled above ground pool deck (without the pool), a well that hadn’t been tested for water quality, no heat or water on, a new boiler that was partially assembled, a septic “pit” without a field and the appraisers report gave a $500 credit for some minor repairs and didn’t mention any of the above items. This loan went as a straight FHA Streamline(k). As an FHA 203(k) Consultant myself I was speechless. Now I don’t know if it makes a difference but this was a HUD home being sold. Can anyone expound on this transaction? Is this typical or did they select a bad appraiser or do HUD homes get treated differently? ….your thoughts?
Dominic,
I believe this speaks to why FHA rules have changed drastically over the past year. It sounds fraudulent. I do understand the role of the FHA appraiser but was there a selling agent on the deal? In real estate there needs to be a team effort to protect the consumer.
As a REALTOR I'm bound by the Code of Ethics. If a REALTOR is unfamiliar with 203(k) loans then they are responsible to get trained or enlist the help of those who are trained. I feel sorry for the purchasers unless he was in on the deal and just trying to get the deal done. I hope you killed the deal.
I purchased my last home utilizing the 203(k) streamline loan and we had to increase our contingency hold back because the utilities weren't on.
What is amazing is that the initial inspector in most cases would also be the inspector to complete the final inspection. Yeah, it sounds fishy.
I do not believe it being a HUD home and going FHA had anything to do with it. No lender wants a non-performing loan. Remember lenders only loan the money because it is insured but the lender is not HUD themselves. Sounds like the loan officer, initial appraiser, and purchaser had something going on because the buyer would still need to select a contractor and get a bid for the work. I personally do not believe that no one in the process pointed out the other 100k in work especially if the pipes were busted, or the furnace and hot water tank could be inoperable.
Just doesn't sound right.
A few hours ago - Financing in Chicago - 2 answers