HELP WITH INSPECTION QUESTION

[Alexandra Kanakis]

I recently did an FHA refi appraisal where I sited one potentially risky item, the exhaust pipe into the chimney of the HWH tank was not correctly sealed and had at least a one inch gap around the entire parameter of the pipe. Went back for a reinspection (which was not repaired correctly) and noticed water running from the corner of the basement down to the floor drain. Paneling coveres the basement wall which is concrete block. This was after a somewhat heavy snow which left a lot of slush & piled snow. On the exterior of the corner is a concrete patio with dirt on the other side. Without removing the paneling there is no way to tell where the water is coming in from. This condition was not noticed during the original inspection but only during the repair inspection.
I can't find the HUD chat room so I came here to ask some advise. Can I amend my original VC report to include the running water, ignore it since the condition was not present during the original inspection and only noticed on a repair inspection, or what? This assignment was from an appraisal management company who has no clue what I should do. The LO just wants the loan closed. I don't want repercussion for not doing something or doing something.
Please advise. Thanks.

 

[Larry Lyke]

Alexandra --

Your plea is so rife with anticipation BECAUSE you realize that you ought to do something, but in fact FHA doesn't "allow" you to amend your VC sheets...

So here's what I've done on several occasions:

I sabotage the CIR by including my new finding(s) along with the acknowledged satisfactory completion of the VC items.

The UW, not knowing how to the handle the new information, orders it contended with. That's all. Now everybody's merry and happy except perhaps the Sellers -- And so?

MY RECOMMENDATION is to follow my advice above. They can scold me all they want to, but they can't remove my new information unless they order me to remove it and do so by conditioning it and then I too will remove it by writ!

You chose right. To do something or nothing. Nothing saves "stuff" for later. Do today what you can't do tomorrow because you might be on probation! Maybe I could coin that, ya think?

Best o'luck.

 

[Ron in AR]

Alexandra,

Like you, I have found problems on a compliance inspection that were not apparent on the original inspection. The UWs I have dealt with tell me to do nothing to the VC sheet. Just notify the UW of the new problem and it is their responsibility to deal with it. They may want to involve you from that point on with re-inspections for further repairs and they may not. It's their call. As long as you notify them (and I would do it in writing), you've done all you can do.


Ron in AR

 

[mbrunson]

I definately agree with the idea of putting the new finding on the CIR. All you have to do is mention the new condition and then it is up to the DE Underwriter what is to be done about it. The LO may not liek it much but in my experience the DE will apprecite your honesty and the fact that you are covering both your and their backs. To say nothing wouldn't be right and it sounds like you already know that...

SDG

Mike

 

[AC King]

You did not mention if the appraisal was for an FHA Streamline Refinance or an FHA refinance of a conventional loan. Two different situations. For an FHA Streamline Refinance, the only repair requirement is for lead based paint abatement for homes built before 1978. The VC Addendum must be completed noting all items not complying with FHA minimal property requirements and it is up to the DE Underwriter to make the call on the repairs if any.

As far as adding to a VC Addendum, there are no provisions for adding noncompliance items at the time of the follow-up site-visit. However, if you did note any such items it is prudent for you to notify the DE Underwriter of those deficiencies. If you have a computer generated form, there will be space on the addendum for adding supplemental data.

 

[Larry Lyke]

AC's Conv-to-FHA or Streamline is pretty much a distinction without a difference.

Just perform a straight FHA appraisal and let the UW do her thing.

The only real difference for the appraiser is that a Streamline doesn't require a HS.