Exclusion from a panel

[Linda B.]

OK - the HUD agent story is one I have to hear! I will keep you all posted. I am trying to gather my facts and proceed carefully. Your input is very helpful.

 

[Sadie]

Check the law in your state. We are a 'one party consent' state for recording. As long as you know that you are recording (and why wouldn't you) it's admissible in court. You don't have to tell the other party.

FWIW, Oregon is also a one party state.

 

[Sadie]

You do n

So the very confusing thing is that the AMC does not have any concerns about my work. This came from a lender they support. They were shocked by the notice from the lender. I work for the AMC - so this whole thing is confusing and a mess. I spoke with the "lead" AMC rep and they are as confused as I am, and told me to go ahead and work on assignments. I forwarded this information to the lender, who said if I take assignments from them, they will file a "charge against my E&O" what???????? Needless to say I have a call into the ACLB and to my E&O rep.

Your client is the lender. The AMC is just the middle man. Unless you are a W2 employee, you do not work for the AMC.

 

[Sadie]

The home with a permit issue was an FHA buy. Buyer was the broker. A three bed 2 bath home was converted without permits to a 2 bed/3 bath home - all without permits. I called FHA and the local municipality. Per FHA the home changes have to meet or exceed the local standards - which state electrical and plumbing changes have to be permitted, etc. The broker/buyer was not a fan.

The second FHA purchase had been a rental; the basement was so soiled with animal urine and feces that I had to wear a scarf over my face to go inside the basement. I asked as a health/safety concern to have the basement carpet cleaned. Both buyer/seller agents did not agree.

Third non permitted sale had an ADU, non permitted that was used as an Air BnB and being sold as such with documented potential income per year. Non permitted ADUs can't be used for short term rentals in this municipality. There were also non owned solar panels, which the seller wanted full value for. Per FHA/Fannie and Freddie - no value for solar unless owned outright. Everyone was not happy.

Your thoughts?

The air BNB you should have let go. You are not underwriting the loan. You are valuing the collateral. You are not giving value to the use. Its not your concern whether or not they are renting it out or storing their goat wool in it. Of course discuss if the improvements are permitted. Review Fannie guidance on un permitted work. Hint it is allow for Fannie. Check and see where HUD guidelines differ from F/F.

I would also have not pushed the bedroom issue. Report what is there, and also report the results of your research. Did you also verify that all the 3 bedrooms comparbles in the area were permitted for 3 bedrooms? What about the ones with a 'den' that doubles as a bedroom? The whole idea about bedroom count and a septic system is the theory that the more bedrooms there are in a house, the more people and there foreuse of the septic system. Just FYI.

As for the carpet, unless it was just piddle in a corner, you were right on. Look in the handbook for this situation in MPRs. I think they may address this exact situation.

 

[Linda B.]

I did not really care about the bedroom count - I was more concerned with basically half of the home converted to a MIL suite, leaving one bed/two bath for the rest of the home, in a market with almost 100% 3bed/2bath. It did force me to find a similar comp - with only duplexes/shared wall units with similar bed/bath counts. Bed and bath count was not the issue - just the work done without permits (not well done); hiding broken windows with a sheet of wood propped up against the window, fencing that was below FHA standards around a pool - just a bunch of stuff that did not meet FHA standards. The bed/bath count was the least of my concern.

I do document non permitted stuff - however I am not the permit police. I will let the lender make the judgement about lending on the property. Lots of non permitted stuff in this semi rural area with ADU's, guest quarters, large cannabis processing shops, etc. When it is common in the area (which is most of the time) I indicate that the "whatever" is not uncommon, the quality of workmanship and the acceptance in the market and if it will impact value and marketability.

 

[Sadie]

I did not really care about the bedroom count - I was more concerned with basically half of the home converted to a MIL suite, leaving one bed/two bath for the rest of the home, in a market with almost 100% 3bed/2bath. It did force me to find a similar comp - with only duplexes/shared wall units with similar bed/bath counts. Bed and bath count was not the issue - just the work done without permits (not well done); hiding broken windows with a sheet of wood propped up against the window, fencing that was below FHA standards around a pool - just a bunch of stuff that did not meet FHA standards. The bed/bath count was the least of my concern.

I do document non permitted stuff - however I am not the permit police. I will let the lender make the judgement about lending on the property. Lots of non permitted stuff in this semi rural area with ADU's, guest quarters, large cannabis processing shops, etc. When it is common in the area (which is most of the time) I indicate that the "whatever" is not uncommon, the quality of workmanship and the acceptance in the market and if it will impact value and marketability.

Thanks for clarifying that. I think if you explain yourself just like you did here, then the bedroom question would be resolved, It seems like that was the focus, not all the other stuff.

 

[Fernando]

I didn't realize most of the complaints were related to FHA.
I don't do that much FHAs. Not much around here and I charge a high premium for extra work and liability.
With your USPAP and FHA knowledge, you should be able to justify what you did objectively. Good luck.

 

[Surf Cat]

I did not really care about the bedroom count - I was more concerned with basically half of the home converted to a MIL suite, leaving one bed/two bath for the rest of the home, in a market with almost 100% 3bed/2bath. It did force me to find a similar comp - with only duplexes/shared wall units with similar bed/bath counts.

My bolds.

I disagree on your non-important stance of the bedroom count. The functional utility of the dwelling was changed, without permits no less. The bedroom count change could substantially alter the marketability of the subject property. Especially in a market where you state nearly 100% of the properties are three bedroom two baths.

I would have expanded the parameters of time and distance to find that elusive two bedroom SFR.

In my second bold.... are you saying you put a duplex in the report for a two-bedroom comp? If so, that may be the reason that the lender wants to go after your E&O.

Sounds like you have a tough market area.

 

[Fernando]

I have a 3 bedrm condo originally modified that way. It's the same model as mostly 2 bedrm units in complex.
My bedrooms are smaller because of its layout but having more bedrooms do increase value of my property.
At least, I can get more rent as 3 bedroom unit.

 

[Tom D]

I didn't realize most of the complaints were related to FHA.
I don't do that much FHAs. Not much around here and I charge a high premium for extra work and liability.
With your USPAP and FHA knowledge, you should be able to justify what you did objectively. Good luck.

You would know if FHA had officially a complaint against you. They send you a regular letter, and a certified letter about your badness. They would not ask the lender, or AMC, to have a meeting with you. This is an inside job, but you seem prepared well enough. But also, don't be a stone wall, see what issues they seem to care about. THEN AGREE TO A BETTER YOU, if you like them.

The poster seems very detailed, i would have been easier like some of the other poster have stated. But poster, on any thread here it's always 50/50. And it's your business decisions alone.
I've avoided the little hills to die on, but i'm always right anyway. Just gotta learn to read the lender.