Safety concerns and conventional lenders

[Don Clark]

Thank you all for your comments regarding my questions but with all do respect I am even more confused now than I was before on how to handle this. Is there something concrete that someone can direct me to that will help me make a decision as to what type of practice is acceptable for my lenders, or should I ask the lender? I do not want to mark these loans subject to due to a safety hazard (handrail, bars on window) if it is not necessary. It seems there is not a consensus regarding these matters and that bothers me. Were appraisers we should not be using words such as I think and maybe in my opinion we should have concrete fact to back up our practice. Concrete help someone please.

I gave you a link to the Fannie Mae guidelines. They are current. Why don't you download them and see for yourself.

Oh what the hell, here it is straight from Fannie Mae guidelines:

•Existing construction. An appraisal may be based on the "as is" condition of the property if minor conditions that do not affect the livability of the property exist—such as minor deferred maintenance—as long as the appraiser's opinion of value reflects the existence of these conditions. The lender must review carefully the appraisal for a property appraised in an "as is" condition to ensure that the property does not have any physical deficiencies or conditions that would affect its livability. If there are none, the lender does not need to require minor repairs to be completed before it delivers the mortgage to us.
When there are incomplete items or conditions that do affect the livability of the property—such as a partially completed addition or renovation—or physical deficiencies that could affect the soundness or structural integrity of the improvements, the property must be appraised subject to completion of the specific alterations or repairs. In such cases, the lender must obtain a certificate of completion from an appraiser before it delivers the mortgage to us. The certification does not need to include photographs of the property unless those that accompanied the original appraisal report are no longer representative of the completed property.

 

[Mike Garrett RAA]

Let me suggest Henry H Harrison's Illustrated Guide to the Uniform Residential Appraisal Report. It sells for $39.95 and gives references to Fannie Mae Guidelines, HUD (FHA) and VA. Also has line by line instructions as well as model comments. I always recommend Mr Harrison's guides to my appraisal students. Don't begin residential appraisal without them.

Henry's company advertises on the Forum...look for his banner ad.

 

[CANative]

This isn't a matter of FHA or GSE appraisal guidelines nor is it a USPAP matter. When you call out "safety issues" or any other issues which is not cut and dried you've transferred responsibility (on a personal basis) to the underwriter and they don't want to be personally responsible.

 

[Deuce of Spades]

List the defects and allow the underwriter to make the decision. But, if you have a good relationship with the lender, send an e-mail asking them specifics about this assignment and what they want you to do (get it in writing). I have had banks that never come back about the security bar windows and have another bank that it is automatic for the appraisal to be marked subject to. Always point out the issues (CYA) but know what your lender requires prior to making the as is or subject to box.

 

[xm72mhd]

With respect to home inspections and safety hazards, I have a war story. I inspected a home in the company of an appraiser who has an extensive background in construction and engineering.

Everything looked spiffy to me, then he pointed out a building code violation that I had no knowledge of. The furnace and hot water heater were in the same room next to each other, the vents from each joined to vent to the outside.

Looked fine to me.

He told me that the vents were joind too close to the appliances, creating the possibility of "blow back" of carbon monoxide gas when one other other turned on There joint must be at least three feat from the appliances to avoid that. The utility room was in the basement and not to far from a couple of bedrooms that were non-conforming due to lack of exterior access and proper ventilation.

No problem? Otherwise the house was OK.

Here is te solution to your dilema. Tell your client to come up with a safety violation list and you will look for that stuff in your subjects. Then you have the problem of whether value is affected or not.

Do not beome a safety violation expert if you can possibly avoid it. Not your job. Even the FHA once had a very specific list that had to accompany the appraisals. I guess somebody didn't like it, cause it went away.

 

[Terrel L. Shields]

4150.2 HUD book..

http://www.hudclips.org/sub_nonhud/cgi/hbks_run.cgi?hbks_run

16. Other Health And Safety Deficiencies
The appraiser must note and make a repair requirement
for any health or safety deficiencies as they relate to
the subject property, including:

o broken windows, doors or steps
o inadequate or blocked doors
o steps without a handrail
o others

Bedroom Egress

All bedrooms must have adequate egress to the exterior
of the home. If an enclosed patio (solid walls) covers
the bedroom window, it is possible that the bedroom
won't qualify as a habitable bedroom. Security bars
are acceptable if they comply with local fire codes.
Occupants of a bedroom must be able to get outside the
home if there is a fire.

 

[Mike Boyd]

You do not need to cite any standard requirements. Lack of stair rails is a safety hazard as are lack of emergency releases on window bars. It is your opinion that the house contains safety hazards. List them and let an underwriter over-rule if they do not like it. In reference to one window or all windows having safety releases: In a raging fire, few, especially children, will remember which window has the release and which does not. If you have a broken leg, a bad knee or hip, the lack of a handrail on ANY steps is asking for another injury. It is YOUR job to provide an opinion of marketability.