Required FHA Repairs & Looming Foreclosure - Workaround? - Short Sale Superstars2024-03-28T15:41:55Zhttp://shortsalesuperstars.com/forum/topics/required-fha-repairs-looming-foreclosure-workaround?commentId=3468065%3AComment%3A319590&x=1&feed=yes&xn_auth=noHi Maria, I haven't been on h…tag:shortsalesuperstars.com,2013-06-16:3468065:Comment:3195902013-06-16T14:25:03.156ZTara Samneyhttp://shortsalesuperstars.com/profile/TaraSemtner
<p>Hi Maria, I haven't been on here in a week (got really busy). Did you get this through? Kevin's link may help. I also found something more detailed (just remembering doing a search for FHA appraisal guidelines). iAs it was a year ago the form may have been replaced. Ultimately, underwriting makes the decision (not the appraiser) so if the appraiser has no photos of mold and just relying on what you wrote- that there could have been mold- seems overreaching to me. I remember I just…</p>
<p>Hi Maria, I haven't been on here in a week (got really busy). Did you get this through? Kevin's link may help. I also found something more detailed (just remembering doing a search for FHA appraisal guidelines). iAs it was a year ago the form may have been replaced. Ultimately, underwriting makes the decision (not the appraiser) so if the appraiser has no photos of mold and just relying on what you wrote- that there could have been mold- seems overreaching to me. I remember I just really fought it with the lender...I think she just passsed it down to the appraiser to drop it, b/c when he reinspected he said he was only there to check the other items. The lender initially 100% agreed with the appraiser (just looked at report)- I had to make the case against the appraiser for overreaching and citing guidelines. Let us know how it turns out.</p> I think the Lender and/or App…tag:shortsalesuperstars.com,2013-06-13:3468065:Comment:3189532013-06-13T17:50:39.157ZKevin - Greenville, SChttp://shortsalesuperstars.com/profile/KevinMWillson
<p>I think the Lender and/or Appraiser is overreaching on some items here. Here is what FHA actually says on repairs.</p>
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<p><a rel="nofollow" href="http://portal.hud.gov/hudportal/documents/huddoc?id=aprval.pdf" target="_blank">http://portal.hud.gov/hudportal/documents/huddoc?id=aprval.pdf</a></p>
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<p>Have the Lender get with the AMC to work out.</p>
<p>I think the Lender and/or Appraiser is overreaching on some items here. Here is what FHA actually says on repairs.</p>
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<p><a rel="nofollow" href="http://portal.hud.gov/hudportal/documents/huddoc?id=aprval.pdf" target="_blank">http://portal.hud.gov/hudportal/documents/huddoc?id=aprval.pdf</a></p>
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<p>Have the Lender get with the AMC to work out.</p> Thank you Alyce! I think tha…tag:shortsalesuperstars.com,2013-06-10:3468065:Comment:3184222013-06-10T07:47:14.580ZMaria Stronghttp://shortsalesuperstars.com/profile/MariaStrong
<p>Thank you Alyce! I think that is a great idea to have the inspections completed up front. I am going to encourage that on future short sales. I have a FreeCycle.com account. I never thought about getting repair materials on there. Thanks again! </p>
<p>Thank you Alyce! I think that is a great idea to have the inspections completed up front. I am going to encourage that on future short sales. I have a FreeCycle.com account. I never thought about getting repair materials on there. Thanks again! </p> I am representing the sellers…tag:shortsalesuperstars.com,2013-06-10:3468065:Comment:3182592013-06-10T07:44:44.703ZMaria Stronghttp://shortsalesuperstars.com/profile/MariaStrong
<p>I am representing the sellers. The buyers waived the home inspection. The buyers have started to make the repairs. They are trying to work around the mold test requirement (see my update above). Thank you for the tip on chapter 13. </p>
<p>I am representing the sellers. The buyers waived the home inspection. The buyers have started to make the repairs. They are trying to work around the mold test requirement (see my update above). Thank you for the tip on chapter 13. </p> UPDATE: Thank you for all of…tag:shortsalesuperstars.com,2013-06-10:3468065:Comment:3183352013-06-10T07:42:44.651ZMaria Stronghttp://shortsalesuperstars.com/profile/MariaStrong
<p><span style="color: #0000ff;"><span style="color: #000000;"><strong>UPDATE: …</strong></span> <span id=".reactRoot[1].:0:1:1:replies10152943780025145_40984837.:0:0:comment10152943780025145_41000899.:0.:1.:0.:1.:0.:0.:0:2" style="color: #000080;"><span id=".reactRoot[1].:0:1:1:replies10152943780025145_40984837.:0:0:comment10152943780025145_41000899.:0.:1.:0.:1.:0.:0.:0:2.:0"></span></span></span></p>
<p><span style="color: #0000ff;"><span style="color: #000000;"><strong>UPDATE: </strong></span> <span style="color: #000080;" id=".reactRoot[1].:0:1:1:replies10152943780025145_40984837.:0:0:comment10152943780025145_41000899.:0.:1.:0.:1.:0.:0.:0:2"><span id=".reactRoot[1].:0:1:1:replies10152943780025145_40984837.:0:0:comment10152943780025145_41000899.:0.:1.:0.:1.:0.:0.:0:2.:0"><span id=".reactRoot[1].:0:1:1:replies10152943780025145_40984837.:0:0:comment10152943780025145_41000899.:0.:1.:0.:1.:0.:0.:0:2.:0.:0">Thank you for all of your responses! I am representing the seller. The buyers agreed to make the repairs before settlement to meet the FHA guidelines. We had disclosed that there was a mold-like substance noted, but not tested. The previous buyers home inspector pointed out what appeared to be mold, but was never tested. The buyer backed out and came back with a lower offer and a repair estimate. We submitted the repair estimate and convinced the short sale bank (NationStar) to accept $20,000 less for the property. That same buyer backed out at the last minute due to personal problems that prohibited them from qualifying. I felt obligated to mention the mold-like substance in the listing when I put it back on the market, although it had never been tested and confirmed to be mold. We are one week away from going to closing with the new buyers. The FHA appraiser is requiring a mold test and certificate based on what I noted in the listing. He did not take any pictures of the mold-like substance, which leads me to believe that he didn't notice it in the house, but picked up on it in the listing after the appraisal. The buyers are in the process of painting and installing a rail to meet the remaining requirements. The buyers' agent is working on having the mold test removed as a requirement, because it is not pictured in the appraiser's report and it was never confirmed to be mold. <a href="http://shortsalesuperstars.com/forum/topic/listForContributor?user=2xwzdksjk5gcn" class="fn url">Tara Semtner</a> referenced a case that she had below. She was able to get her clients out of getting a mold test after she pulled the FHA guidelines and cited the applicable sections. Thank you Tara Semtner for this information. </span></span></span></span></p> I agree with Kevin. Unless r…tag:shortsalesuperstars.com,2013-06-10:3468065:Comment:3182552013-06-10T06:55:44.536ZJim McCormackhttp://shortsalesuperstars.com/profile/JimMcCormack
<p>I agree with Kevin. Unless repairs are stipulated in the contract, all real estate sales are AS IS with all faults subject to legally required disclosures. Just because the buyer's lender is requiring these repairs does not make them the seller's responsibility. It is the buyer's responsibility to know what requirements their lender has. I agree with Chris that the buyer's agent should be able to flag issues that they know from experience so at least some of the responsibility is theirs,…</p>
<p>I agree with Kevin. Unless repairs are stipulated in the contract, all real estate sales are AS IS with all faults subject to legally required disclosures. Just because the buyer's lender is requiring these repairs does not make them the seller's responsibility. It is the buyer's responsibility to know what requirements their lender has. I agree with Chris that the buyer's agent should be able to flag issues that they know from experience so at least some of the responsibility is theirs, but who hired the buyer's agent? The buyer. Therefore, everything falls on the buyer. From a practical standpoint on a normal sale it is usually just a point of negotiation and playing the "who wants this sale more" game. However, in a typical short sale it is usually just of matter of whether the buyer will pay or not since the seller will not typically be a position to pay for such repairs.</p>
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<p>The more important question is whether you should even advise short sale seller clients to accept such an offer without a definitive conversation up front regarding the fact that the buyer will make any and all repairs their lender may require. If the buyer balks at this I would tell my seller client to pass.</p> I know this won't help for yo…tag:shortsalesuperstars.com,2013-06-09:3468065:Comment:3183962013-06-09T18:19:23.415ZAlyce Nelsonhttp://shortsalesuperstars.com/profile/AlyceNelson
<p>I know this won't help for your current sale, I do feel your pain, we went down the same road only once and learned our lesson. </p>
<p>Going forward... We use a clause in our MLS for all short sales: "Buyers with conventional loans or CASH only. As-Is condition may not meet FHA financing requirements. FHA Buyers will only be considered if they agree to do their inspections up front before the short sale is submitted." This has worked very well for us and we do not have any more FHA…</p>
<p>I know this won't help for your current sale, I do feel your pain, we went down the same road only once and learned our lesson. </p>
<p>Going forward... We use a clause in our MLS for all short sales: "Buyers with conventional loans or CASH only. As-Is condition may not meet FHA financing requirements. FHA Buyers will only be considered if they agree to do their inspections up front before the short sale is submitted." This has worked very well for us and we do not have any more FHA fire drills while we are trying to close. Yes, it puts the buyers inspection money at risk, but there is greater risk of harm to the seller, so we usually gain agreement.</p>
<p>We actually work to move all our buyers to do their inspections up front; more and more are doing this as it gives all parties involved much more time for more desirable solutions, and often gives the sellers time to complete DIY (Do It Yourself) repairs. I recommend looking into charitable organizations in your area that may be helping low income families and families facing financial hardship with repairs. One of our towns has a building supplies co-op where such families get free materials for home repairs. Also utilize FreeCycle.com for free repair materials. We've gotten lucky there a number of times... also with free landscape plants too! Find out about these organizations before you need them so that they are in your bags of tricks and ready to go!</p> Since you did not mention a h…tag:shortsalesuperstars.com,2013-06-09:3468065:Comment:3183142013-06-09T15:58:55.096ZCynthia Robbinshttp://shortsalesuperstars.com/profile/CynthiaRobbins
<p>Since you did not mention a home inspection I am assuming one was not done. The painting part is an easy fix. the rail part is an easy fix. I guess your clients need to change the type of financing and flip it over to a 203K . The sellers can always file a chapter 13 to stop the foreclosure sale until these issues can be resolved. Not the cheapest way to go, but it is an option. </p>
<p>Since you did not mention a home inspection I am assuming one was not done. The painting part is an easy fix. the rail part is an easy fix. I guess your clients need to change the type of financing and flip it over to a 203K . The sellers can always file a chapter 13 to stop the foreclosure sale until these issues can be resolved. Not the cheapest way to go, but it is an option. </p> If the buyer is a VA loan bu…tag:shortsalesuperstars.com,2013-06-09:3468065:Comment:3183122013-06-09T15:47:31.405ZLinda Cadottehttp://shortsalesuperstars.com/profile/LindaCadotte
<p>If the buyer is a VA loan buyer, can funds be put in escrow to have work done after closing?</p>
<p>If the buyer is a VA loan buyer, can funds be put in escrow to have work done after closing?</p> Depending on the lender the b…tag:shortsalesuperstars.com,2013-06-09:3468065:Comment:3182282013-06-09T14:13:46.697ZTaquilla W McKnighthttp://shortsalesuperstars.com/profile/TaquillaWMcKnight
Depending on the lender the buyer may be able to set up an escrow for the repair amount. Professional bids are needed for the determination of price but buyer does not have to use the company that gives the bid. I have had this done before but my buyer had to put 1 and a 1/2 of the amount into escrow and the funds were not released by her lender until after the repairs were completed (after closing) of which appraiser had to go out again to make sure those items were repaired. 203k is the…
Depending on the lender the buyer may be able to set up an escrow for the repair amount. Professional bids are needed for the determination of price but buyer does not have to use the company that gives the bid. I have had this done before but my buyer had to put 1 and a 1/2 of the amount into escrow and the funds were not released by her lender until after the repairs were completed (after closing) of which appraiser had to go out again to make sure those items were repaired. 203k is the cheapest way to go.