Bad Foundation Claim

[Robert Muir]

Talked to the E&O Lawyer Thursday and she said that it appeared that the appraisal and reference letter on the foundation was more than adequate enough coverage on my part and she did not see any anticipated problems with squelching this claim.

It was nice to hear an attorney state that my appraisal looked good and that I had made the right disclaimers for this problem. She is going to write the letter to the opposing attorney and hopefully get this thing all settled.

I talked to the building inspector on Thursday also. He stated that the foundation met city and state codes. He also stated that the homeowner had complained to him about the wedges on top of the support piers having loosened up and caused cracking in the sheet rock in the home. The homeowners’ opinion was that the foundation was sinking, instead that possibly the wooden wedges have been shrinking/expanding with the humidity and with people & furniture moving around in the house it could have changed the balance a little and caused the wedges to shift or drop. Don’t know for sure because I haven’t been under the house since I conducted the inspection two years ago.

I will let you’ll know what happens and remember do not sign those silly foundation certifications that the lender gives you. 8)

Bob

 

[Robert Muir]

Below is a copy of the letter that I send back to the lender when requested to fill out that manufactured certification that has something about the foundation on it. P.S. The E&O lawyer like the letter too.

:!: Pursuant to your request, the following comments should be helpful in making an informed financial decision concerning the above referenced property.
Your office faxed to me a Manufactured Homes FNMA Eligibility Criteria Sheet for me to fill out and sign. I had no problems with certifying most of the line items. The one line item that I could not certify as being true at the time of the inspection states:

“The subject’s wheels, axles, and trailer hitches must have been removed when it was placed on its permanent site, and both the perimeter and pier foundations must have footings located below the frost line. When piers are used, they must be placed according to the manufacturer’s recommendations. Anchors must be provided where required by state law. Foundation systems must be designed by engineers to be compatible with soil condition of the permanent site.”

The first part of the above paragraph I can certify to: The subject’s wheels, axles and trailer hitches have been removed. The rest of this section, I cannot attest to. How would I know that the foundation system goes below the frost line, which is 24” below ground level? How would I know if the pier system is to the manufacturer’s recommendations if I don’t have a copy of their setup guidelines? Also how will I know if the foundation was designed by an engineer without that engineer’s drawings & letter of inspection for when it was installed?

If the lender has any of this verifiable data they can pass it on the appraiser for review and the form then can be filled out in its entirety. I recommend that a qualified inspector or engineer inspect the foundation system to determine if it is correct foundation for this type of home and meets the soil requirements for this area.

In summary, please be advised that if the sheet was filled out in its entirety and the above statement was not crossed out, then I would be committing fraud. The underwriter/reviewer should review this form and possibly make changes, because it is somewhat questionable and possibly illegal when they are asking someone to commit fraud on their behalf. :!:

Bob

 

[Farm Gal]

8) 8)
GREAT letter Bob!

I was laughing myself silly at the final paragraph, or were those tears of rage :twisted: kind of hard to tell.


Perhaps if we ALL wrote such strongly worded commentary that stupid form would get modified or go away!

I usually put a much milder disclaimer... remember when I said your E&O company was going to love you? Belay that. I am willing to bet you are going to be the poster child for some time to come, and cited in edcuation calses for years.

Sleep well, I have seldom heard of someone who deserves it more.

 

[Robert Muir]

Lee Ann,

Thank you :lol: :lol:

Bob

 

[Caterina Platt]

Bob,

Thank you for posting this. We all now have a 'real case' where the appraiser was asked to answer to items out of his scope of expertise and rightfully declined. I am using this example for the very next LO who gives me a hard time about that darn form. Wish I could use the more applicable adjective, but 'darn' will have to work.

Many kudos to you for your careful and proper disclosures. You have reminded me and many others, I'm sure, why we need to be careful and hard headed when it comes to such requests.

Here's hoping the next 10 go suit free for you as well! Good job!

 

[Farm Gal]

Cat:

I could not agree more!

Lo and behold not but two days after I congradulated Bob for his initial response to this idiocy.....

I get a even worse phrased and written version of what he responded to... so I used the quote button, rearranged the words considerable and sent of my very own STRONGLY worded "you're an idiot" response.

Thanks BOB!

 

[Jo Ann Meyer Stratton]

I wonder how long it will take underwriters to realize there are only two lines in the new guidelines? (of course they haven't been realizing that there isn't any requirement for most of the "stuff" they ask for in the old guidelines that will no longer exist June 30, 2002 in the past)

"We purchase mortgages secured by factory-built housing that is designed as a one family dewelling, assumes the characteristics of site built housing and is legally classified as real property."

That an appraiser can answer--does it look similar to other homes in the area, is it taxed as real property? (note to underwriters--none of that stuff on your form is itemized in the new guidelines) Of course wheels, axles and tongues have to be removed for a home to look similar to the site built homes, but from there on, it is what ever is normal and typical in that specific area.

"We require the factory built home to be permanently affixed to a foundation system that is appropriate for the soil conditions of the site and desgined to meet local and state codes."

Now they are getting into an area of items that an appraiser cannot answer. About the only thing an appraiser can do is verify with the local government to find out what they required and do they have confirmation that the home was installed properly? If they don't then the underwriter will have to go to work and have inspections done by licensed engineers or contractors or inspectors---but not an appraiser!

Think mortgage company will retire their lists?

 

[Caterina Platt]

Jo Ann and all,

There have been many times when I have been tempted to create my own Manufactured Housing Addendum with questions that an appraiser can actually attest to.

What do you all think? Should we create our own revision here? We could even place a phrase to the effect 'soil conditions, pier placement, and foundation design should be verified by an expert(s).' Would be a bold move with some resistance I'm sure, but it may be just the thing to take this particular monkey off our backs.

Am I dreaming????

 

[Pamela Crowley (Florida)]

Caterina,

Excellent idea! Let's do it!!!

 

[Jo Ann Meyer Stratton]

I have created my own manufactured home checklist when a lender demands one. I only list the items that were in the soon to be expired Fannie Mae Guides, quote the section of the guidelines at the very top. And have statements about not being a licensed engineer or contractor or home inspector. I also end the check list with "See paragraph three on page two under Additional Features of the addendum attached to the original appraisal report". I had already commented within the original appraisal report about Fannie Mae's concerns. Now with the new guidelines I will be doing some revisions. Just had a go around with a client. I had done my usual comments in the addendum to the original report. Month later they called and insisted on a check list. Sent them mine--which quotes and refers to Fannie Mae. Few weeks later get a frantic call, underwriter will not accept mine, has to have the "Fannie Mae checklist" filled out. Tell them Fannie Mae doesn't have a checklist. No matter, they have to have their form within an hour. So I put the same info I already had given them twice on their form, with statments all over it that I am not an engineer, contractor or inspecter and information had been provided in the addendum to the original appraisal report. I faxed that to them. Then a month later, get another frantic phone call, they have to have an original, so sent them an original with the original signature date and a new original signature date, stapled to a copy of Fannie Mae guidelines and comments that the information had already been provided three times previously. Haven't gotten any recent frantic phone calls lately, so maybe that underwriter that worked at MacDonalds last month is finally happy.