1004D and Foundation Certificate

[Andee]

I'm being asked to complete a 1004D for a property that I inspected that needs foundation repairs. According to the foundation report, which was completed after my report, it states the it is "...generally structurally sound.", then goes on to state that 20 piers are recommended. I made my report "Subject To" Foundation Repairs, they asked for it to be "Subject To" a Foundation Certificate in a revision, so I changed it. The repairs have not been completed and they are asking me to complete the 1004D based on "...generally structurally sound." My gut says NO because the report states "Subject To" a Foundation Certificate, which we all know will not be provided until the work has been finished.

I did contact the Engineering Firm that wrote the report to get clarification on the statement "...generally structurally sound.", they basically said it means the property is habitable but there is some work needed, otherwise they would not have recommended the piers.

Is my thought process wrong when I keep telling them I will not provide the 1004D without the Foundation Certificate?

 

[TerryRohrer]

The lender is asking you to accept their liability without pay. They can accept the engineer's report and clear the condition without your input. I would let them do so.

 

[Cob]

You should ALWAYS state subject to a structural engineer report or assessment if there appears to be foundation problems, these determine if there are foundation problems that need to be addressed, a foundation company is going to come back 100% of the time and say foundation repairs are needed.

 

[Andee]

You should ALWAYS state subject to a structural engineer report or assessment if there appears to be foundation problems, these determine if there are foundation problems that need to be addressed, a foundation company is going to come back 100% of the time and say foundation repairs are needed.

But they are now asking for the 1004D stating the work is complete because the report states "...generally structurally sound.". I don't want to provide it because I don't have something from the Foundation Company that states the work is complete.

 

[Andee]

The lender is asking you to accept their liability without pay. They can accept the engineer's report and clear the condition without your input. I would let them do so.

Thank you for the input, have you ever told a lender you won't accept the liability? I'm at that point. The homeowner even went to the lender and let them know up front the reason for the refi was for upgrades and foundation work, so they weren't blindsided by this. It came up in conversation while I was inspecting the property.

 

[alebrewer]

When the appraisal is made 'subject to' an inspection (foundation, roof, plumbing, etc.), there is nothing else for the appraiser to do. You should not be completing the final as you're not qualified to opine on the situation. It's the underwriter's job to determine if the inspection report is sufficient to appease any risk the lender is exposed to. The item that triggers whether the appraiser is to do a reinspect, or the u/w is to sign off is which box you check at the bottom of P2 on the URAR.

 

[Cob]

I get that, I am saying in the future to state, report "Subject To" structural engineer report or structural engineer inspection and not "Subject to" Foundation Repairs, I would complete the 1004D and state EXACTLY what the report says, that it's, generally structurally sound and the property is habitable, check the "NO" box on 1004D where it states, have the improvements been completed, then explain that all you have is the report with the statement and that NONE of the work has actually been completed.

 

[alebrewer]

Andee - was it for FHA or conforming?

 

[Dublin ohio]

I'm being asked to complete a 1004D for a property that I inspected that needs foundation repairs

How did you determine that it needed "repairs"?

 

[TerryRohrer]

Thank you for the input, have you ever told a lender you won't accept the liability? I'm at that point. The homeowner even went to the lender and let them know up front the reason for the refi was for upgrades and foundation work, so they weren't blindsided by this. It came up in conversation while I was inspecting the property.

Sure. I don't know the situation but if you did an appraisal subject to the foundation being repaired, you don't have to accept and complete the final. In your circumstance as I understand it, I would not do a final.