js330729
Freshman Member
- Joined
- Oct 5, 2009
- Professional Status
- Appraiser Trainee
- State
- New Jersey
I have a question about insurability statements within HUD REO appraisals for FHA financing. The appraisal is based on "as-is" condition. From my reading/research there are 3 types of insurability applicable. Insurable (No repairs), Insurable with Repair Escrow (no more than $5,000 in MPR/MPS repairs). Uninsurable (exceed $5,000 in MPR/MPS repairs).
I have been reviewing an assignment that my supervisor has completed just for my learning and I came across the following statement in an additional comments addendum listed before a breakdown of MPR repairs with cost to cure. *Note repairs on this property were under 5,000, and I feel this should be listed as Insurable with Repair Escrow.
*UNINSURABLE. THE SUBJECT PROPERTY DOES NOT MEET, IN ITS "AS IS" CONDITION, FHA'S MINIMUM PROPERTY REQUIREMENTS, AND THE COST OF REPAIRS TO MEET MINIMUM PROPERTY REQUIREMENTS EXCEEDS $5000 AND/OR THE PROPERTY'S CURRENT CONDITION WARRANTS THE PROPERTY TO UNINSURED. THE DETERMINATION OF UNINSURED FOR THE "COST TO CURE" ON PROPERTIES THAT DO NOT EXCEED $5,000 IS BASED ON ADDITIONAL REPAIRS THAT COULD BE REQUIRED ONCE THE REQUESTED INSPECTION(S) ARE COMPLETED FROM A PROFESSIONAL. UNINSURABLE PROPERTIES CAN QUALIFY FOR FHA'S SECTION 203(K) REHABILITATION PROGRAM AND, DEPENDING UPON THE SCOPE AND EXTENT OF REPAIRS NEEDED, THE STREAMLINED (K) LIMITED REPAIR PROGRAM. *SEE REPAIR ADDENDUM.
......Is this an acceptable to modify this statement? I feel that it is not, but I am a trainee and have not yet questioned her on this. I feel that where she is coming from is that she knows upon further inspection of the mechanicals, the property will be uninsurable, although based on her inspection of what is "visible" that determination can just not be made.
Is she opening herself up a can of worms so to say, or should she just conform to an Insurable w/escrow statement. I think what she feels from reading the report, is that if she did not modify this clause, this property would most likely be processed as Insured w/escrow. The borrowers would have a serious fix on their hands down the road.
I would appreciate any guidance.
I have been reviewing an assignment that my supervisor has completed just for my learning and I came across the following statement in an additional comments addendum listed before a breakdown of MPR repairs with cost to cure. *Note repairs on this property were under 5,000, and I feel this should be listed as Insurable with Repair Escrow.
*UNINSURABLE. THE SUBJECT PROPERTY DOES NOT MEET, IN ITS "AS IS" CONDITION, FHA'S MINIMUM PROPERTY REQUIREMENTS, AND THE COST OF REPAIRS TO MEET MINIMUM PROPERTY REQUIREMENTS EXCEEDS $5000 AND/OR THE PROPERTY'S CURRENT CONDITION WARRANTS THE PROPERTY TO UNINSURED. THE DETERMINATION OF UNINSURED FOR THE "COST TO CURE" ON PROPERTIES THAT DO NOT EXCEED $5,000 IS BASED ON ADDITIONAL REPAIRS THAT COULD BE REQUIRED ONCE THE REQUESTED INSPECTION(S) ARE COMPLETED FROM A PROFESSIONAL. UNINSURABLE PROPERTIES CAN QUALIFY FOR FHA'S SECTION 203(K) REHABILITATION PROGRAM AND, DEPENDING UPON THE SCOPE AND EXTENT OF REPAIRS NEEDED, THE STREAMLINED (K) LIMITED REPAIR PROGRAM. *SEE REPAIR ADDENDUM.
......Is this an acceptable to modify this statement? I feel that it is not, but I am a trainee and have not yet questioned her on this. I feel that where she is coming from is that she knows upon further inspection of the mechanicals, the property will be uninsurable, although based on her inspection of what is "visible" that determination can just not be made.
Is she opening herself up a can of worms so to say, or should she just conform to an Insurable w/escrow statement. I think what she feels from reading the report, is that if she did not modify this clause, this property would most likely be processed as Insured w/escrow. The borrowers would have a serious fix on their hands down the road.
I would appreciate any guidance.
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