FHA REO Has The Axles, Uninsurable?!

[Caterina Platt]

First time I've heard this one. I am being told by First Preston that the presence of the axles renders the property uninsurable. Huh? Now, how easy is it to fix this problem? Cutting torch and a few minutes, viola! No more axles. This hardly seems 'terminal'.

What say ye folks of vast knowledge?

 

[Pamela Crowley (Florida)]

Nobody want to do a loan on a MH with the axels and tongue still attached.

Just report, let them decide!

 

[Tim Hicks (Texas)]

"Subject to" removal of axle, hitch and wheels and placed on pemanent foundation per HUD and local building codes?

 

[Pamela Crowley (Florida)]

Is this for a pending sale of that REO? If yes and the financing will be FHA, then Tim is right on.

Interesting, isn't it, that it already had FHA financing once.

Another blind appraiser!

 

[Caterina Platt]

Hey guys!

Yes, that's how I currently have it. 'Insurable with conditions' with one of the conditions being a licensed structural engineer's certification of the foundation (which requires the running gear be removed to meet FHA guidelines.) Thought we were covered. Even offered to require the repair if it made them happy. NOPE! It's uninsurable in their eyes. I know that 4150.2 states any unit over 1 year must have had the running gear removed, but I really think they're out in left field on this one. It is such an easy fix! Good grief, all MH's had the axles at one point. They all had to have them removed the same way to qualify for any lending for cripes sake. (or should have, should I say)

I am being told my report must be changed to read 'uninsurable'. Knowing that this is probably a $150 repair item, (only that high due to rural area and PITA factor of getting a guy with a cutting torch out there) it's a bit hard to toss common sense to the wind, state such and sign my name to it.

Yes Pam, this does tick me off, another so called blind FHA appraiser. Heck you trip over the things measuring the place.

 

[Pamela Crowley (Florida)]

I am being told my report must be changed to read 'uninsurable'. Knowing that this is probably a $150 repair item, (only that high due to rural area and PITA factor of getting a guy with a cutting torch out there) it's a bit hard to toss common sense to the wind, state such and sign my name to it.

I would have to say "NO". That is a simple repair item that does NOT make that property 'uninsurable'.

 

[Jo Ann Meyer Stratton]

By the way the actual wording in the National HOC Reference guide Chapter 1, page 1-09d is: "A certification attesting to compliance with this handbook (Permanent Foundations Guide for Manufactured Housing) must be obtained from a licensed professional engineer and included in the insuring file." Using the term structural engineer is too specific (besides a structural engineer would cost two to three times of a civil or mechanical or professional engineer--who are all qualified to do the inspection).

Caterina's client needs to read Mortgagee Letter 00-27 which describes what is required and necessary for a HUD REO appraisal report. And her situation is an "Insurable with Repair Escrow: A property that requires no more than $5,000 for repairs to meet FHA's MPR as DETERMINED BY THE APPRAISER, is eligible to be marketed for sale in its as is condition with FHA mortgage insurance available, provided the purchase(s) establishes a cash escrow to ensure the completion of the required repairs. Purchaser(s) are permitted to include in their mortgage an amount equal to 110% of the estimated cost of the repairs."

 

[Pamela Crowley (Florida)]

Thanks Jo Ann! I should have known you'd have the exact answer! I haven't done any FHA REOs to prep them to sell. I can't imagine something so simple being a hold up.

 

[Caterina Platt]

Well, now. I must clarify something. It appears that one appraiser requires a few more hours of sleep and recovery from a day in the heat inspecting 8 properties prior to forum posting. The pieces of running gear I'm tripping over- tongues. Ya that's it. :redface:

 

[Pamela Crowley (Florida)]

Hey Cat, I'll trade ya!

You come clean up my burnt brain messes and I'll go clean up yours! Neither one of us needs to guarantee anything being 'right' when the brain is at least half fried! I'm too damn tired to even care sometimes! Wouldn't answer my phone yesterday.... might now for most of today either!