Help a Poor LO Before She Kills Her Appraiser

[CathCoy]

Just kiddin,' folks. But before I have a conversation with my favorite appraiser, I'd like to know what you all think. Here's the situation:

I just got a call from a borrower who was visited yesterday by my appraiser. Subject property has three bedrooms, two of which have security bars on the windows with safety latches, one of which does not. The one that does not is not used as a bedroom.

Appraiser told my borrowers that she (appraiser) must "report" this to the lender; that borrowers must either (a) install a safety latch on the barred window that doesn't have one; or (B) take the bars off and re-stucco to eliminate all signs of bars.

I've never heard of this, let alone the idea that an appraiser would so inform the borrower without calling me first. I'm mighty irritated, but I think the appraiser is mistaken. Must ALL sleeping rooms have safety latches on security windows? I don't think so. Where would I find the guidelines by which an appraiser is required to do her job?

This is a conventional loan. Thanks.

 

[Pamela Crowley (Florida)]

The FHA Handbook states:

6. Bedroom Egress

All bedrooms must have adequate egress to the exterior of the home. If an enclosed patio (solid walls) covers the bedroom window, it is possible that the bedroom won't qualify as a habitable bedroom. Security bars are acceptable if they comply with local fire codes. Occupants of a bedroom must be able to get outside the home if there is a fire.

This was the only place I could find any reference to security bars in the FHA guidelines so the third bedroom - even if it's not currently being used as a bedroom - would need to have safety latches on the bars.

I'm not aware of anything referencing security bars in FNMA guidelines. This would be something I would mention in the Appraisal Report but would not make it "subject to" being changed.

Try not to fault the appraiser too much - she is trying very hard to do the job correctly. Just seems a little confused between the FHA guidelines and FNMA guidelines. I'm sure that if I'm wrong and missed something in the FNMA guidelines that someone else here will correct me/us.

Good Luck!

 

[wyecoyote]

Even though it is not currently utilized as a bedroom it must have a safety latches or have the bars removed. This is a potential safety issue. Your appraiser was giving the heads up to the borrower so that they can get on the work of installing latches or removing the bars.

As Pamela states there is nothing in FNMA guidelines but in FHA there is.

As I see it if there is a potential safety issue I report that like what you have here. Most clients that I deal with will make them correct the safety issue prior to funding the loan. Like one I did last week, balcony is 10 feet of the ground with no railing. They called on Friday for me to go out and reinspect the house and do a 442 that the railing is installed. I also let Homeowners know of potential safety issues prior to leaving. But the call is with the client/lender whether or not to correct the safety issue.

Just my 0.02 cents.

Ryan

 

[jtrotta]

Believe Pam has it correct; could not find any FNMA guidelines on "Window Bars" - but the other area of concern from your (LO) end would be the "Homeowners Insurance" policy - and you would have to check what their requirements are in respect to a "B & E" and the end result. Granted this has nothing to do with the "appraisal" end, but reflects the "risk" aspects of your "Mortgage Language", with respect to "maintenece" - I believe. Therefore, your failure to require "compliance" with the insurance policy, may increase your risk in the event of a loss; which may lead to a failure of the mortgage and thus eventually create a loss in value based on a various amount of circumstances. Hope this helps.

8)

 

[CathCoy]

I think you're right...she's confusing FHA with conforming. I would not like her to note it in the appraisal because then the lender might make the homeowner remove/replace the safety latch. It depends on how the appraiser words it.

But I'm still irked that the appraiser would say to the homeowner, without calling me first, "You've got to do this or that." Then the homeowner calls me, "That's no easy or inexpensive job, you know!" Meanwhile, rate lock's expiring, etc.

 

[Terry Russell]

Egress in a sleeping room:

Got to have it. In nearly all cases if a room is used for sleeping it must have direct means of egress to the outside of the house. And this egress must be accessible without any other appliance to aid in exiting. In other words, the windows have to be large enough and close enough to the floor so an individual may climb out easily.
These are not lenders guidelines, this is fire and building code. Any state that has adopted CABO Standards must enforce these codes. And it is one area that can not be "Grandfathered in".
I know the law is abused everywhere, but it is the law. If an appraiser includes a bedroom without these provisions, the appraiser and the appraisal are subject to deep scrutiny to say the least.

Terry

 

[CathCoy]

But isn't "IF it is a sleeping room" the key here? It's not a sleeping room, although it's a "bedroom" for room count purposes. When the homeowner bought it a year ago, this condition was not called out, so now I'm having a difficult time convincing the homeowner that I haven't hired a Nazi to appraise his house this time.

I checked with the homeowner again. He said that the appraiser said she was going to report him to not only the lender but the City Building Inspector! That's it--she's fired.

 

[wyecoyote]

CathCoy,

Even though it is not currently used as a bedroom it has the future potential use as a bedroom. The first appraiser should have noted it and required the change at that time. This makes the current appraiser appear in a bad light because the other appraiser did not do the job correctly.

As far as reporting the result to the City Building Inspector. That falls under confidentialty clause of USPAP. IMHO, The appraiser should not report anything to the local authorities concerning the house.

Ryan

 

[CathCoy]

Since reporting this condition to the City is not an option due to confidentiality, and I can't find anything in Fannie/Freddie guidelines (maybe some of you can) about security windows/bars, then I think this is a non-issue. Do I have a leg to stand on to tell her she can't call this out?

 

[George W Dodd]

Dear CathCoy,

I would suggest that you at least talk to the appraiser before you "fire" her. One side of a story is always lopsided.

If the room is to counted in the "room count" as a "bedroom" then it must conform to those requirements.

If this room is listed as "other" would the dwelling have enough bedrooms to still be marketable? Or would that cause functional obsolescence?

All properties that are sold to the secondary market must meet HUD's minimum property standards. This is a often overlooked factor when people use the word "as is". It is only "as is" when its with your own money.