What is it with these FHA orders lately?

[RSW]

Is it just me or, are there beginnig to be a lot of sub-prime crappy appraisal orders going through FHA right now? I've had three this week alone that were just hidious.

I just went to do an inpsection today and when I got there I found that the dwelling was a site built home built around a single wide mobile home that had partially burnt down. The frame was still there for the single wide section and the site built home looks ok. The kitchen, utility area and bathroom are the only thing on the inside that looks like a mobile home as they have 7" high ceilings. The rest of the house looks just like a site built home. I am not sure of the age of the mobile home section. It may be older than 1976 but I really don't know. There were no HUD tags present since it was built into the site built structure. The owner stated she thinks the mobile home burnt down in 1986 but she is not sure.

I really don't think this thing is going to pass FHA. I really don't want to finish the report. What would you do?

 

[Tom Woolford]

Cash the check, finish the report as best you can, go have a couple beers. Yes, FHA is now the new subprime. 3% down, fairly low FICO scores, its the best the brokers have to work with.

 

[Caterina Platt]

This will not go FHA, conventional, etc.

The only thing this homeowner can do is rip out every scrap of that remaining MH, and refurbish accordingly.

I had a former appraiser (never an FHA approved, but she worked in the biz for over 20 years) trying to get her own place done and it was very similar. A pre-HUD where much of it had been destroyed, but they kept the frame and built a nice addition all around it. I called the HOC just to make sure, and no way.

 

[Mike Boyd]

This will not go FHA, conventional, etc.

The only thing this homeowner can do is rip out every scrap of that remaining MH, and refurbish accordingly.

I had a former appraiser (never an FHA approved, but she worked in the biz for over 20 years) trying to get her own place done and it was very similar. A pre-HUD where much of it had been destroyed, but they kept the frame and built a nice addition all around it. I called the HOC just to make sure, and no way.

I agree. Reject the property for not meeting MPS and send them an inspection fee invoice.

 

[RSW]

I'm glad you agree. That was my thinking about this too.

 

[TC]

I would charge an inspection fee as well and not complete the appraisal.

TC

 

[truk1]

I agree with Tom. FHA has become the new subprime. When that phone rings with an unfamiliar voice on the other end stating...."Do you do FHA?" My first thought lately is.....Let the games begin!
I went through one today that the borrowers didn't have a permanent heat source. They have disconnected the furnace because they "had it out with the gas company" and are "going to put in electric baseboard sometime." In addition, the duct work has been removed (hey, good price for scrap these days!) and the furnace has been paneled up on the main floor so there is no access (You can't make this stuff up!). Enjoy the weekend fellow appraisers. Monday will be here soon....KH

 

[JSmith43]

There is virtually no secondary market at the present time for sub-prime paper. Therefore, FHA.

Not too many lenders are doing renovation loans right now (203K). There are also a few conventional renovation loan options.

My employer is sending me to training in CA in a few weeks so I will be certified to originate their FHA renovation loans. They are a lot of work, mostly educational and proactive guidance for the borrower, or the process will take forever.

Quite a few REO's that are submitted under 203B really need a renovation loan. I will sometimes take a quick peak at a REO property if I can't tell from talking with the buyer or agent if the place is likely to meet FHA MPS.

Question for any USPAP weenies....I mean, specialists:icon_mrgreen: out there that might read this: Since I wear multiple hats, I'd like to hear from any of you that might find a problem with me taking a peak and offering an opinion as to FHA MPS.

The only thing I can think of is the ethics rule, since the borrower may be generally familiar with my appraisal background. I sure am not planning on keeping a work file for 5 years or make contemporaneous notes of my observations.

I tell them my MPS opinion carries zero weight with our appraisal AMC, since I don't tell them my opinion, nor do I have a choice of appraisers. But, I use the information gained by my observations and expertise (which I believe comes just as much from reading lending guidelines for LO purposes as it does for maintaining appraisal competency) to better advise them if they should consider a renovation loan as a back-up plan.

I think I'm clean on this, but I want to run the AF gauntlet to see if I missed something!

 

[Mike Boyd]

If all you're telling them is "that they might consider a rehab loan...." I see nothing wrong with it. Are these deals that another LO working for your company has originated? If so, you might want to bring him/her into the equation. Are you getting paid per deal for what you do or are you salaried?

 

[JSmith43]

If all you're telling them is "that they might consider a rehab loan...." I see nothing wrong with it. Are these deals that another LO working for your company has originated? If so, you might want to bring him/her into the equation. Are you getting paid per deal for what you do or are you salaried?

Per deal. These are agents bringing me what they think is a 203B deal, but, it is so easy for me to see into the future on these things. Right now, I just hand them off to the renovation specialist. Pretty soon, I'll just have to do them myself They are typically, lots of work.