Reverse mortgage & cost to cure

[reliantappraisals]

Anyone ever hear of this.

I have a prospective client who is instructing me to do a cost to cure on a Reverse Mortgage. He says whatever the cost to cure automatically comes out of the money the current home owner gets and has to be used to get the repairs done.

This is a new one to me. Im going to follow up on this with the lender and ask to talk to whomever is funding his loans to see what exactly it is that they want me to do far as adjusting for the cost to cure and which reconciliation box they want checked.

 

[CANative]

Mark this box
“subject to repairs or alterations”


when the appraisal involves existing housing, or new construction more than 90% complete with only buyer preference items remaining (floor coverings, appliances, landscaping packages (soil must be stabilized to prevent erosion)), requiring repairs or alterations to:
• Protect the health and safety of the occupants
• Protect the security of the property
• Correct physical deficiencies or conditions affecting structural integrity
• Complete buyer preference items for new homes, or to
• Complete repairs/improvements noted in work order or contractor estimates for the Streamline K
• Meet FHA Minimum Property Requirements
The appraiser must indicate the extent of repairs and note this in the appropriate section of the appraisal, or in the “additional comments” section, or in an addendum, under the heading of “Reconciliation – Required Repairs” listing the repairs noted together with an estimated cost to cure.

 

[reliantappraisals]

huh...

Thanks for the info. Ill have to read over the FHA booklet again in light of this property. Its not your typical run of the mill residential appraisal.

 

[Kevin Mc]

Is it an FHA loan? There are several reverse products out there now that are not FHA loans and the client may have their own lists of rules etc...make sure you know these prior to inspection.

 

[reliantappraisals]

yah its a bonifide FHA deal.

 

[Mike Boyd]

Anyone ever hear of this.

I have a prospective client who is instructing me to do a cost to cure on a Reverse Mortgage. He says whatever the cost to cure automatically comes out of the money the current home owner gets and has to be used to get the repairs done.

This is a new one to me. Im going to follow up on this with the lender and ask to talk to whomever is funding his loans to see what exactly it is that they want me to do far as adjusting for the cost to cure and which reconciliation box they want checked.

SOP. I mark the "subject to" box and list the cost to cure in the report. No adjustment as your report is SUBJECT TO completion of the repairs. Just make sure your cost to cure is accurate. The DEU can over-ride what you put in the report but it then becomes THEIR problem, not yours. You will likely be asked to make a reinspection once the work has been completed. I charge $125 for the reinspection.

 

[Rose in CT]

Im resently FHA approved and interested in doing reverse mortgages. What is the difference in appraisal scope of work and/or requirements in the appraisal written requirments ? I could not find any info on the HUD site. Please advise

 

[Mr Rex]

[FONT=Verdana,Geneva,Arial,Helvetica,sans-serif]Reverse Mortgages (HECM)[/FONT]
[FONT=Verdana,Geneva,Arial,Helvetica,sans-serif]http://www.HUD.gov/images/common/hgv-fmt-space.gifhttp://www.HUD.gov/images/common/hgv-fmt-btmleft.gifhttp://www.HUD.gov/images/common/hgv-fmt-space.gifhttp://www.HUD.gov/images/common/hgv-fmt-btmright.gif
[/FONT][FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Chapter 1[/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Appraisal & Property Requirements[/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Page 1-12[/FONT][FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]General[/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Section 255: Home Equity Conversion Mortgages (Reverse Mortgages, a.k.a. HECM) allows a borrower aged 62 and older to borrow against the equity in a property that has limited outstanding debt. The subject property under this program must be an existing one-to four-unit dwelling in which the mortgagor occupies one of the units. It may be a condo if it is in a FHA approved project or it may be a manufactured home if the home complies with outstanding FHA guidelines for manufactured homes. [/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Appraisal & Conditions[/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]The appraiser must perform the appraisal with the same standards and forms expected in an FHA single-family appraisal. This includes noting the same deficiencies and repair items. In certain instances, the borrower is not required to treat any defective paint surfaces after closing for properties built before 1978. [/FONT]
[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Please see: HUD Handbook 4235.1, Rev-1, Section 3 for requirements of appraisal and property[/FONT].

 

[CANative]

I guess old people are less likely than younger people to eat paint.

 

[Mr Rex]

If it hasn't killed them yet, gotta die from something.