Questions regarding FHA appraisal.

[BobAG]

My wife and I recently purchased our first home with an FHA loan. There were some minor issues that were all paid for by the bank. Initially we had a report of heating / ac issues. We offered to meet the bank halfway on repairs, but they said they had taken care of it. Upon move in our home was 45 degrees, the heater ran for about two hours and got the house close to 50 degrees. We had the home insurance company (American Home Shield) send out a heating tech to check the heater out. He said that it had been rigged to run with the heat strips only, and that it was wasting money and not safe.

Most of the minor repairs dealt with fungus from leaf litter on the deck. The pest company also installed a new hot water heater. They claimed that the old working unit was leaking and replaced it with a new unit. When we moved in we had no hot water. We had a electrician come out to turn it on for us and found that the wiring had been butchered. Upon calling the pest company we were told that they put the new water heater in but never tested it. They will not tell us who did the job. There is no paperwork concerning this job and they refuse to fix the issue. When the initial appraisal was done there was hot water and now there is none.

What are our options? We really like the home and have invested two thousand dollars into it and don't want to lose it. Should we contact a lawyer, FHA or is the seller responsible?

Thank you for your time.

Robert

 

[The Warrior Monk]

What are our options? We really like the home and have invested two thousand dollars into it and don't want to lose it. Should we contact a lawyer, FHA or is the seller responsible?

Thank you for your time.

Robert

A lawyer can point you in the right direction, but the problem is you're only dealing with $2,000. Hiring an attorney and taking someone to court is likely to cost way more than the $2,000 you've lost so far. Small claims court is definitely the way to go. You might lose, but you're likely to lose a lot more with the attorney.

I don't do FHA work, so I have no idea what it involves. It is unlikely the seller is responsible, unless they intentionally misrepresented something...caveat emptor is typically the rule when buying real property.

 

[Tom Woolford]

Someone had to sign off that the repairs were completed in a professional manner. A couple well placed threats might get your problems resolved.

 

[BobAG]

Update.

Thanks for the quick replies as this is becoming a time sensitive issue with pipe freezing temperatures on the horizon. The seller sent out another electrician to check our hot water heater. We now have our third diagnosis and are just hoping someones going to pony up... In regards to the FHA when the heater first presented issues during initial inspections we were told the loan would not go through. It seems FHA requires the homes to be move in ready with a minimum household temperature of 50f; and running hot water. Which seems to leave us with very few options, fix heater or blow whistle and lose money and time invested in home. Hopefully I'm overlooking a much better solution as neither option is attractive. Once again thanks for your time and insight.
Robert

 

[james stephens]

I am an FHA appraiser and it certainly sounds like someone did not do their job correctly. Unfortunately, FHA appraisals are for the lender and not the homebuyer, and FHA does not guarantee the condition of a home. That is why FHA strongly recommends that the homebuyer get a professional inspection done. That said, you may want to call your nearest FHA Homeownership Center and tell them your story and maybe they can ruffle some feathers for you.

 

[BobAG]

A little more info.

The seller sent by an electrician and we now have a working water heater. On the other hand our realtor called and said nobodys going to step up to fix the heater. After receiving some legal advice it sounds like small claims court is the way to go. We are leary of contacting FHA due to the fact that they will not allow loans with a home that cannot maintain temperatures above 50f. Can they cancel our loan and throw us out on the street? That's our biggest fear at the moment, though today it was warmer outside then inside...
By the way we paid for a heating specialist to come and inspect, he said the system needed quite a bit of work. At that point we offered to meet them halfway in costs to fix it (have all this in writing). The bank ended up sending out a crew to fix it, they told us it was working fine and FHA ready. They rigged the heater to run off heat strips and left the heat pump inoperable. We live in the mountains and our home is getting cold enough that this morning we woke to find a bottle of soap completely frozen.
Once again thank you for your time we are beyond confused at the moment, and with our realtor not willing too fight for us anymore we are getting quite worried..
Robert

 

[james stephens]

To me, it does not sound like the heating system is FHA ready. The heating system should heat the dwelling to a comfortable temperature, not to just 50 degrees F. The 50 degrees F rule only applies to homes that use a wood-burning stove or solar systems as their primary heat source. Additionally, the heating system should have a useful life of at least two years. At the point in time where is was initially discovered that there was problem with the heating system was when a professional HVAC contractor should have been brought in to certify the heating system, not a "crew".

I don't know for sure, I have never heard of it, but I seriously doubt that FHA would cancel your loan and kick you out of the house because they find out there is a problem with the heating system.

 

[Mile High Trout]

Hi Robert.

There is always some tough issue with getting into a new home, unless you pay top dollar for completely turn key homes, which is not always as sensible of a move for average buyers.

Keep your eyes on the prize. What's more important, the closure of a minor issue, or the position your in as a home owner there? After the fact is much more difficult of a spot, than before the fact. In the future, pay close attention to the home inspectors report, because appraisers usually don't get to review those. Additionally, it's often times lower cost than an appraisers services and inspectors might be fine with walking you through the home as they inspect.

Per your statement, the overlooked solution: Upgrade to on demand coil water heater! Potential for tax rebate incentives may exist, and you'll save money regardless. Don't let those pipes freeze. Keep water dripping at night so convection keeps the pipes from freezing. It might be a good idea to examine the water pressure regulator as well (if present), because when they fail, they can contribute to hot water heater failure.

FHA does go through a process of finally insuring the loan. Unfortunately it sounds like the lender may have gone with the lowest bidders, which is an increasingly problematic approach throughout a huge sector of the lending industry right now. As a consumer it's hard to get away from that, and it's a main point many appraisers are arguing about with lenders at this very moment.

What's your move? Re examining the purchase and services, or sweeping some minor issues under the rug with some minimal material spending so you can get back to living comfortably?

 

[Riick]

Was this property a reposession; if so, was it owned by HUD, or .....??

Someone knows what Firm or individual inspector signed-off on the Heat-Pump, saying it was in good working condition.
Who?: The Underwriter for your mortgage, or perhaps the "Direct Endorsement Underwriter" at the Lender who made the mortgage.
(Remember, FHA doesn't make the mortgage, it merely INSURES payment of the mortgage to the actual Lender, who is the one who makes the mortgage)

Ditto on the H/W heater.

 

[nicholz12]

why not sue FHA? if it's a HUD house.