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Bummer For Them, Verify Information

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Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
My sup and I did an inspection on a Manufactured home the other day and the info sheet we get from the lender says MH on permanant foundation. So as we're doing the inspection, we look under this thing and there is nothing but cinderblocks and wood support. I look at my Sup and say, "It doesn't look like there is a foundation under this thing". He take a couple more looks, I take a pile of pictures, and we continue the inspection.

When we get inside the house, we ask "happy homeowner" if they have any documentation that their home has a permanant foundation. HO says, yep, I remember the last appraiser we had come out had put that information in his report. But that report was in storage, yada yada couldn't get it for us right now would fax it to our office. Great ok thankyou

I'm doing some digging around. That's what us greenies do. We make a lot of phone calls asking a bunch of questions trying to cover everthing so I don't end up on the states disciplinary list for being a dummy; anyways,

I find out from the county that this thing has never had a 433A recorded and that the MH is probably personal property. So, I call the assesor and ask him how they treat that property. They say we have improvements (detached stick built garage, stick built storage, deck) assessed apart from the MH which is taxed as special personal property.

Ouch for the home owner. This was a refi appraisal. That means that they already had money borrowed against this personal property that they are not going to be able to refinance with.

Ouch for the former appraiser who some how got the lender to think there was a permanant foundation. Personal inspection and county records tell otherwise.

Lesson for me, always verify information. And don't cover up snakes that could come back to bite me down the road like it will for this former appraiser.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
If your appraisal is for FHA financing, require an inspection of the foundation by an engineer, they can't get a FHA insured loan until the engineer certifies that the foundation meets the requirements of the Permanent Foundation Guide. By the way, piers or stacks of cinder blocks are acceptable in certain conditions depending on location, depends of whether the home was constructed for a "basement ready" foundation or not, foundation could be either a Type C, I or E. If it was not a basement ready type of home, the perimeter enclosure would not be providing any support, would not be touching the home itself with a strip of wood or caulking of some type to cover up the gap between the home and the enclosure. Buy the Permanent Foundation guide, costs $25 and makes a nice addition to the library. It is available on the internet, but doesn't have illustrations. The hard copy book has page after page of very detailed illustrations of various types of foundations (including stacked cinder blocks and wood).

If your appraisal is for a Fannie Mae loan, then the foundation has to meet local codes and be permanently attached to a foundation per local code. So either the lender or you need to verify with your local government that the home was installed and set up in compliance with their requirements.

Your appraisal would be subject to whatever paper work and procedures/conditions your local assessment agency requires for the home to be taxed as real property. Right now it sounds like the current lien holder only has vacant land as collateral for that loan, since the home is being taxed as personal property. (although maybe the paper work is still in progress from the previous loan application and due to the scheduling of the tax year, just hasn't taken affect yet--it can take over a year here in Arizona). For both the land and the manufactured home to be collateral for the loan, the home has to be taxed as real property (at least the process completed). Those procedures and conditions should be met before the loan is funded (why your appraisal would be subject to).

By the way, oldies need to make lots of phone calls, digging, research, asking questions, etc, etc, too!!
 

Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
Jo Ann, where do you store all this information? :eyecrazy:

You are appreciated,

Josh
 

Soar Ohio

Sophomore Member
Joined
May 8, 2002
Professional Status
Certified Residential Appraiser
State
Ohio
Joshua,
I would not assume that the first appraiser did anything wrong. Just did a pre-forcloser the other day on a manufactured home that was never converted to real estate. Called the lender to let them know that them know the house was not considered real estate. They told me that they had an appraisal and I must be wrong. I had them read the appraisal and they were shocked that it was subject too the home being converted to real estate. They bank now has 100k loan on a 17k lot. This is going to be a fun one to watch.
 

Willie

Senior Member
Joined
May 30, 2002
Professional Status
Certified General Appraiser
State
Tennessee
Tim, not only fun, but hilarious. Love to hear a lawyer say, "You mean you relied on and didn't even read the appraisal." ROFL.
 

Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
Yikes, either way I wouldn't want my keester hanging out like that when it all comes down. I hope the appraiser didn't miss it and that it was on someone else instead. We have enough yahoos out there already.

Josh
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
As to Permanent Foundation, unless it was set to FHA, every mfg. is on blocks, period - and 99% are not set to FHA. Mfgs are not allowed in cities here except in parks, and in parks, blocks are acceptable. There's no codes outside of the city so anything goes. That being said, FHA will approve a home set on bois 'de arc tree posts, not even treated timbers, so I don't know what the beef is about blocks. Until the 50's half the homes built were on concrete blocks and most still are.

As to being on real estate, if it's not a relatively new unit, I have to research the Mfg home site to see if it's been converted. Tax records aren't that accurate and don't necessarily reflect if the title's been surrendered. Just because it's on the tax roll doesn't mean that the title's been surrendered.

Roger
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Actually, even if it is FHA, the actual foundation could be steel jacks because the foundation is the support for the unit, which is whatever type of piers that are under the unit (for homes not installed over a basement). Where FHA gets picky is the perimeter enclosure, it has to be concrete, masonry or pre-treated wood. Unless the manufactured home is constructed in the factory as "basement ready", there cannot be any support under the perimeter of the unit.

Per Permanent Foundations Guide for Manufactured Housing:

Type C: Foundation system supported and anchored at chassis only, to equally spaced piers.

Type E: Foundation system supported at chassis and exterior wall but anchored for uplift and overturning at exterior wall only.

Type I: Foundation system supported at chassis and exterior wall but anchored for uplift and overturning at exterior piers only.

Exterior Foundation Wall: Foundation walls placed directly below the exterior perimeter walls of the unit. These walls may, or may not, be structurally used as bearing walls under horizontal loads. If these walls are not used structurally there are called non-bearing walls or skirt walls.

A typical installation for FHA in Arizona is the illustration on page A - 28 of the PFGMH, which has adjustable steel piers on concrete pads (no frost-line) or concrete footings below frost-line in the higher elevations and a concrete block perimeter enclosure (non-bearing wall or skirt wall), although masonry or pre-treated wood is also acceptable.

For Fannie Mae it would be whatever is acceptable to the local government (in Arizona, the state would have jurisdiction), so it could be almost anything as long as the wheels, axles, tongue are removed and some type of perimeter enclosure is installed (gotta keep dirt and those vermin our from under the unit!)

Buying the hard copy of the PFGMH for $25 would be an excellent resource in any office that ever completes an appraisal of manufactured housing. The illustrations are very valuable.
 

Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
Buying the hard copy of the PFGMH for $25 would be an excellent resource in any office that ever completes an appraisal of manufactured housing. The illustrations are very valuable.

Where do you get one? link? phone number? I'm just a trainee right now and out of the first 15 appraisals I've done with my Sup, 5 have been Manufactured. Learning a lot from my Sup and the forum, looking at some continuing ed too. With that kind of ratio, I am going to see a lot of those things I'm guessing, so any good ideas on classes?

Thanks,

Josh
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
It can be ordered on line using a credit card to pay for it through:

www.huduser.org/publications/pdrpubli.html

Permanent Foundations Guide for Manufactured Housing 1996* $25.00

There are a batch of other interesting books that range in price from $5.00 to $15.00, really some interesting stuff for only five bucks.

Another interesting book I have run across (nothing official, just interesting) was written by a former sales manager for a manufacturer (most of his books are on bicycle racing), so the name of the company is Cycle Publishing, formerly Van der Plas Publications.

http//www.cyclepublishing.com

The book I found interesting is "Buying a Manufactured Home--How to get the most bang for your buck in today's housing market" $14.95. Another one that I will be soon ordering is "Manufactured Homes: The Buyer's Guide, the simple guide to the process of buying a manufactured home" (also $14.95). These books describe how homes are built, the selling process and lots of other good stuff. Just nice additions to a library on factory built homes.

So if a lot of appraisals do involve factory built housing, I strongly recommend research as much as you possibly can. As well as spend time in your local assessment office to find out all their rules, regulations, laws, etc, etc that apply to the assessment, taxation, ownership process for factory built homes. And state offices too! You can get a list of state offices off the HUD.gov website. As well as a lot of other good stuff. On the main HUD.gov web site, do a search for manufactured housing, then print out and read all their articles, announcements, guidebooks, etc. Including parts of the HUD building code!

Research is fun!!!

The NAIFA is in the process of re-writing their seminar on manufactured housing, check out
http://www.naifa.com for any classes to be held.

If you are interested in manufactured homes as personal property then the Lincoln Institute would be the best source.
 
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