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Foundation Repairs - Subject To - Who Approves This

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SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Several questions...

Inspected property that showed signs of foundation settlement (slanted/uneven floors), interior/exterior cracks, etc.

Seller's Disclosure form - part of the purchase contract provided - clearly state by the seller that the home has "foundation problems".

Seller statements at time of inspection indicated foundation settlement in the past.

Made the appraisal "subject to" inspection of the foundation.

Received a Home Inspection report that marks foundation "deficient" and then further states "the foundation has observed settlement"

Lender wants me to change appraisal to "as is" because they sent me the home inspection - apparently they did not read it or do not understand what "deficient" means. I told them... NO.

They then send a letter from a foundation company stating foundation is fine - not signed, no person's name, and no contractor number. I send it back and request that the letter be signed with the person's contractor number AND that it specifically states what date home was inspected.

Lender sends yet another foundation company letter instead - this one states that they did a "desk review" of the foundation. WTF right?

Again, they want me to change the appraisal to "as is".

I have told them that the underwriter can approve whatever letter they want and submit to FHA, but that I am NOT changing the report to "as is"or doing a 1004D at this point. Everything from the lender is screaming unethical actions.

I have my own observations, the seller's statements, the seller's disclosure and the home inspection report all indicating foundation problems. All they have is an unsigned letter, and another letter stating they did a desk review of the foundation, but no actual physical inspection of the property.


So for the question: Where in 4000.1 (I've read it) OR anywhere else in FHA/HUD does it state that the underwriter is the party responsible for accepting the inspection letters? In prior 4150.2 and other prior mortgagee letters I believe the language used was that the "underwriter will determine whether or not" an inspection is required.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
So for the question: Where in 4000.1 (I've read it) OR anywhere else in FHA/HUD does it state that the underwriter is the party responsible for accepting the inspection letters? In prior 4150.2 and other prior mortgagee letters I believe the language used was that the "underwriter will determine whether or not" an inspection is required.

Call the HOC, tell them everything you said here. Cite the HOC by name, everything they tell you, and send in your report with what the HOC told you.

:D
.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
They can't close without you rubber-stamping the non-repair or risking their own neck lying.
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Oh c'mon. I desk reviewed it and the foundation is fine. How stupid is that? :rof:
 

General D

Sophomore Member
Joined
May 10, 2009
Professional Status
Certified General Appraiser
State
Michigan
Pose this question to your E & O carries for advice and counsel... cover yourself. The foundation is documented with deficiencies and you have observed and disclosed the condition. This is what Appraisers are required to do.
 

Michigan CG

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Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Pose this question to your E & O carries for advice and counsel... cover yourself. The foundation is documented with deficiencies and you have observed and disclosed the condition. This is what Appraisers are required to do.

This!!!
 

SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California

That's a no brainer. Already documented in the appraisal as per OP, and will not be changing the appraisal report.

The question is rather doesn't the underwriter have the authority to approve the BS foundation report if they want? Is there FHA documentation that specifically states the underwriter can approve their foundation letter???
 

jay trotta

Elite Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
Unless you have a "structural engineer" report, signed, sealed & delivered, the report should remain "As Is" (Subject To as noted) ; it is Not what you see that's the problem.....

If the UW wants to overwrite what you provided, totally up to them....why would you care ? If you do not have the structural report / keep the report as is period.
 
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hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The question is rather doesn't the underwriter have the authority to approve the BS foundation report if they want?

Yes. The DEU could sign-off on the appraisal with its subject-to condition if s/he wanted to accept the liability for doing so.
 

A Brit in California

Senior Member
Joined
May 6, 2006
Professional Status
Certified Residential Appraiser
State
California
Hate to be sarcastic but yet again.....this is what being an appraiser has developed into. We should be providing an opinion of value for a given date based on what we can readily observe.

I have seen many damaged foundations, especially when tree roots are the underlying (and obvious) cause. With the comments in the purchase agreement added to your observation of the obvious damage, I would have made the report subject to a structural engineering review by a person licensed in that capacity.

If the underwriter wants to approve the loan without it......then I would say any resulting liability would be assumed by them.
 
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