Mine subsidence question

[Hungry Hippo]

Looking for some experience with a home with an on-going mine subsidence claim. I am pretty sure I have covered all my bases with explanations, engineers report and research to cover my responsility to the lender.

Now looking at how I cover myself!

The subject (per the engineers report) is at the early stages, but the report mentions current movement and certain future substaintial damage.

My concern is current value, adjustments for known/future issues.

There are only a few sales that mention mine subsidenace, I have called all agents involved only to have 1 return a call.

As this is an as-is appraisal assignment, if I use similar sales (with no known mine subsidence issue - since I can find none) and just make a small adjustment for current condition, I feel I may be misleading the client, as common sense (and the engineers report) mention "certain substantial future damage."

If I could find support for a large adjustment, I am not sure what my liablity could be since there is not substantial damage now.

I did find 2 sales in 2008 that had substantial damage that would be great support for a large adjusment, but was only able to confim info on 1 of the sales. That sale had already used over $200,000 in funds for repairs and had less than $30,000 remaining in its claim for future repairs. According to the agent, that home is "still moving." At this point the subject has used only a small amount of its alloted insurance claim.

Hope that's not too confusing! Any thoughts or guidance would be greatly appreciated.

 

[Terrel L. Shields]

does it look like this (west of joplin) or this? Greers Ferry Lake?...the yellow spot in that pix is J D. McFarland (retired geologist from AGC)'s tee shirt.

If catastrophic failure is possible slash inevitable, then there isn't much value left.

 

[TEL2002]

What would be the value of the home if you picked it up and moved it????? Leaving it in place the value is gonna drop to zero minus cleanup costs...maybe tomorrow maybe next year.

Is this appraisal for a purchase????? I can't believe anyone would purchase a home that is undergoing subsidence let alone one that will have a nasty future.

 

[Tim The Enchanter]

New meaning for the term money pit. :lol:

 

[Hungry Hippo]

Yes, it's for a purchase - FHA, too! I can't believe anyone would buy this home, either, especially after looking at the engineer's report that I saw and that they (buyer) signed off on. Regardless, I called FHA this afternoon and here's what I was told: It used to be cut-and-dried, FHA would not make this loan. However, this was "tested" and now FHA puts the final decision on the lender. The lender typically will call for a geological engineer's report and base their decision on those findings. As far as the value goes, FHA said to appraise the property in its current condition, not it's potential future condition (this is the part that was tested in court that made them change their procedure). Disclose all known facts as well as information found in the engineer's report and make the appraisal "subject to repairs and inspections as required." At that point the lender has all the information they need and it's up to them to decide if it's in their best interest to make the loan or not! Not what I was expecting to hear.... but, you learn something new everyday. How boring would it be if we didn't?

 

[Terrel L. Shields]

The LO has to be a mental midget to ever think FHA would lend on such a property.