BOA/HUD SS approved after a year but inspection reveals major problems

Hi all. I am the buyer of a BOA/HUD short sale that was just approved after a VERY painful year of dealing with BOA. We could never have gotten to this point without all of the input of this board's amazing members. We were able to get HUD to re-appraise and get the file escalated to capable reps using many of the tips on this board. Approval was actually quick after getting the file into the right hands. After overcoming many issues in the last two days in getting the utilities turned back on (electric problems, furnace problems, etc.), the plumber came today to do a pressure test so that the water could be turned on in order to do our home inspection. Lo and behold, we find out that what we thought was one pipe that froze before Safeguard winterized the house was literally every pipe in the house leaking. Plumber says the whole house needs to be replumbed to the tune of $8K-$10K. This is coming from a very reputable and capable plumber, so I do not doubt the veracity of his findings. Does anyone have any experience with a major problems discovered after approval? Does HUD/BOA ever agree to make the repairs? If you've had success, any tips are appreciated! Trying to see if any of you can offer any hope at this point or if this will just wind up in foreclosure. Thank you!

Replies

Roy Mason May 5, 2013 at 11:18am

Call the corp office and explain to them the situation. They do not make repairs most likely but they may lower the price of home send the reports and home inspection,   Also call this in to the corp office.    Explain that they can deal with this now OR when they turn the home over to a REO agent

Remind them that you will send the report to the REO agent when it comes on the market as an REO and that agent will have to disclose it to the new buyer..   Get on the phone and call corp office and explain all this.   OR your clients can get the 203K loan to rehab and make repairs themselves,

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Stephen Trad May 5, 2013 at 1:53am

Have the seller file the claim with whoever's covering the property. Ask for a variance for the credit to buyer to be filed on seller's behalf and provide the Phase2 rep with all of this data. Include the appraisal from the buyer's lender definitely go 203k if possible. The FHA is more willing to grant variances on their deals if they're keeping it in house.
Liz Clark May 1, 2013 at 4:09pm

Dirk, thank you so much for taking the time to offer your thoughtful and informative response.

Your assmption on the purchase price is correct, but quite honestly, I have a high degree of reluctance to close until this repair has been completed... even with money set aside for remediation. To avoid any future surprises, I want to do a complete, thorough inspection of the property and cannot do so until we have a water supply.

I had thought of the insurance aspect but presumed negligence played a part, prohibiting coverage. I will certainly give it a try, though.

Your advice is excellent and I will follow it beginning tomorrow morning. I'm just not sure how HUD will play into the equation or what kind of additional delays this will cause.

Thanks again. This website and its members are a tremendous resource for anyone involved in a short sale.
- Kathy Fuhriman > Liz Clark May 2, 2013 at 2:12am
  
  Liz,
  
  It is not too likely for any repairs to be made on the home before closing. You will most likely need to get a loan program to purchase the home with a repair escrow built in to complete your desired repairs after you own the property. HUD does not make repairs even to the houses they take back in FC.
  
  Good luck with that one.

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