Looking for some pro bono legal advice

[SSG Snuggle Bunny]

And who doesn't like Sonny Bono?



I'm buying property. I've gotten such a good deal I had to go FHA even though I was ready to throw 20% because no conventional lender would touch an amount that low, not even the VA.

The reason I wanted to avoid FHA is because just knowing it was government-based set my bunny-sense tingling at the threat of too much stupid shit and sure enough the government delivered.

3 days before closing they told me they wanted 2 cost estimates for repairs listed in the appraisal. Estimates are free but the contract extension was $225 and nobody could get out to the property within a day or two.

I'm told FHA has a responsibility to ensure the property is sold in a livable condition.

Now I'm told FHA wants 8 business days to review my loan app even though they aren't lending me the money. That means I probably have to throw another $225 for another extension.

The bitch of it is:

The property is a HUD repo which means FHA had the lead the last time it was sold.

One of the repairs I have to spring for is the fact the windows were not installed properly.

So now FHA is dragging this out over a month past contract--at my expense--for repairs they demand on items they had a responsibility to ensure were done properly in the first place but they obviously did not.

Who do I waterboard and how much can I get from them?

[DumbAss Tanker]

No offense, but start with yourself for not having a lock on the financing before you set a closing date.

[SSG Snuggle Bunny]

No offense, but start with yourself for not having a lock on the financing before you set a closing date.

I was pre-qual'ed, clean credit, conditions cleared (apart from non-sensical details like, "We need pay stubs when you go to closing to prove you didn't quit you job...in the army"), the whole 9 yards.

They're demanding repair costs have to be added to loan amount then escrowed. This is AFTER FHA already had the property appraised, inspected, blessed-off on said inspection and had a repair escrow set aside in the original purchase contract.

So the way I'm seeing it: FHA blessed-off the original installation, then they blessed-off on an inspection report for escrows on the purchase contract. When I'm 3 days from closing they demand a *third* inspection on a property contracted to be sold "as is."

When do they stop demanding new inspections for the exact same details?

Why do they bless-off on inspections then imply those inspections are inadequate?

Why, if the property is being sold "as is" do they demand it be brought to a certain standard? I can't help but think if I went after them for the house being in poor condition they would whip out that clause in a heartbeat. Why is it so one-sided?

Hell, I don't want to sue for money, I just want them to back off Teh Stoopid. I wish to **** they would sell it "as is" and quit dropping this shit on me. I'll fix the ****ing windows just give me my goddam house.

[debk]

Just saw this thread, Snugs.

Are you getting a straight FHA loan, or is it what's called a HomePath or soemthing similar specific to a foreclosed property?

If you are getting a regular FHA loan, that's why you are having so much trouble. Have they told you yet, the repairs have to be done within 30 days from closing date? If FHA lets a loan go through without demanding the repairs be done prior to purchase, they will send an FHA appraiser/inspector out 30 days after closing to make sure all repairs have been completed.

If you are getting a loan specific to a foreclosed property needing repairs, I'm surprised they are asking for a 3rd unless there was too much diffence between the other two estimates....or there is too much difference between the estimates you are getting and the estimates of repair stated by the listing agent - and the other agents who did Broker Price Opinions (what I do) - for the property, when it was initially taken back from the homeowner.

Also, if it's a HUD property, and you are getting an FHA loan and they are the ones causing the delays, why are they charging you a fee?

Usually....if the buyer is the cause of the delay - in the case of purchasing a foreclosure - the buyer must pay penalties. If the seller causes the delay, no penalties are paid.

If the property was a pre-approved property for loan by the seller, and you are getting your loan through them, then you should not be paying for the delays.

If you got your loan from a bank or a mortgage lender....not the seller(HUD) ...and it's your bank/lender that is asking for all the estimates/inspections...it's on you.

If it is on you, pay the money, or HUD has the option of cancelling the deal for "failure to purchase in a timely manner". Especially if they have back-up offers/contracts on the property...if they do, they can and will go with another buyer. You will have no recourse. I've seen it happen before.

[SSG Snuggle Bunny]

The plot thickens.

Just got back from the property. Went out for a well & septic test; an FHA requirement. Potability seems reasonable enough, I'm not complaining...

...BUT...

...this is AFTER HUD has had the property inspected. They have to inspect the property to determine if it is eligible for financing or if it must be sold for cash only.

It was listed as eligible for financing. I bid on the property contingent upon financing. I contracted for contingent upon financing.

The inspection report declared the plumbing was servicable.

This afternoon we found out the plumbing is NOT servicable. There is at least 1 pipe missing (the 1 that feeds the water heater) and there is no power to the pump.

No plumbing, no power = no well test. No well test = not eligible for financing.

[debk]

The plot thickens.

Just got back from the property. Went out for a well & septic test; an FHA requirement. Potability seems reasonable enough, I'm not complaining...

...BUT...

...this is AFTER HUD has had the property inspected. They have to inspect the property to determine if it is eligible for financing or if it must be sold for cash only.

It was listed as eligible for financing. I bid on the property contingent upon financing. I contracted for contingent upon financing.

The inspection report declared the plumbing was servicable.

This afternoon we found out the plumbing is NOT servicable. There is at least 1 pipe missing (the 1 that feeds the water heater) and there is no power to the pump.

No plumbing, no power = no well test. No well test = not eligible for financing.

All that stuff is the fault of not only HUD, but the listing agent.

What saves them....and screws you....is it's listed as an "as is where is" property.

What might help you get your money back(the $225), that you paid to HUD, is that they said it was eligible for financing.

Any money that you paid out for inspections or appraisal, is gone.

FHA loan also requires a septic tank inspection.

If there is water at the street....FHA requires that the property tie in to the public water system. Check and see if there is a public water line, you could insist that the property hook into it, and that would eliminate your well  issue.

[SSG Snuggle Bunny]

Yeah, I know about the inspection costs...cost of doing business.

But I will be trying to get my $225 and drop a bag of hammers on anyone I can.

Apparently this is a rampant issue with HUD as my realtor and broker both report these issues are fowling deals on a fairly regular basis.

Your tax dollars are work.

The real ironic injustice is: HUD is supposedly meant to allow the common rabbit to move into areas at low cost and by their presence, help renew and develop those areas. Yet, they shoddy--if not fraudulent business practices--mean only investors can get into their properties which jacks-up costs making it even less accessible to the intended target group.

I don't need HUD; I'm entangled only by happenstance but this should embarrass anyone who would advocate for this sort of government interventionism.

[Eupher]

I hate stating the obvious, but nobody but a DUmmy actually thinks the government accomplishes a helluva lot, besides looking out for itself.

I think that's one of Parkinson's Laws (h/t to DAT) 

[debk]

I have mixed feelings about FHA loans.

From the buyer's side, the loans do help first time buyers the most. Not only from an affordability standpoint, but also, their inspections help the buyers as much as possible, to not get into a "lemon". And their appraiser/inspectors do make sure that any repairs that were found in a home inspection (which FHA requires), are done prior to the closing.

From the seller's side...they can be a flippin' nightmare. Seller has to pay additional closing costs for the buyer that are imposed by the FHA, which is usually around $400-500, that the seller HAS TO PAY! The seller can get slammed with ridiculous FHA requirements. I had one house, that had a 6" to 4' retaining wall along the driveway by the garage with a 10' flower bed between the retaining wall and the front walk. 3 or 4 days before closing, FHA insisted a 30" tall fence be put up the entire length of the retaining wall!! Should have seen me scrambling to find a handyman who could whip that up in 2 days!!! It was a 30-40 yr old house, that I'm sure had had an FHA loan at some point, but there is no "grandfathering" when it comes to an FHA loan.

VA loans are even worse, when it comes to making sellers jump through hoops. Again, good for the buyer. I have a real problem with VA loans, in that they will get a buyer into a house with very little cash paper money...I did one years ago, and it cost the AD Army Sgt and his wife $79 and change to get into the house. That was not the bad part...the bad part was when he was switched from recruiting to going back to an Army base situation less than a year later. They were upside down in the house!!! He was supposed to have been in the recruiting office for 3 years! They ended up renting it out....

HUD started this new loan deal on foreclosed properties some time ago, and has really been pushing it since the first of this year, because the buyer pool of people with cash paper money, is drying up or has dried up, across the country. They have so many properties on their hands, they are doing anything they can to unload them.

I know it doesn't seem like it now...but you might want to be thankful that this has happened. If something so simple as a pipe missing from the hot water heater was missed....who knows what else - much more serious - was also missed.

Before you get into a contract on another one...if you know anyone that has building or contracting experience, take them with you to look over the house, before you spend money on a licensed home inspector. Neither your realtor nor the listing agent, should object. Buyers do it all the time, particularly on a foreclosed property.

I'm so sorry this has happened to you, Snugs, not only for the loss of the money and the house, but it's so very frustrating too.

[SSG Snuggle Bunny]

...HUD started this new loan deal on foreclosed properties some time ago, and has really been pushing it since the first of this year, because the buyer pool of people with cash paper money, is drying up or has dried up, across the country. They have so many properties on their hands, they are doing anything they can to unload them.

Not enough it seems.

I know it doesn't seem like it now...but you might want to be thankful that this has happened. If something so simple as a pipe missing from the hot water heater was missed....who knows what else - much more serious - was also missed.

Probably.

Before you get into a contract on another one...if you know anyone that has building or contracting experience, take them with you to look over the house, before you spend money on a licensed home inspector. Neither your realtor nor the listing agent, should object. Buyers do it all the time, particularly on a foreclosed property.

I'm so sorry this has happened to you, Snugs, not only for the loss of the money and the house, but it's so very frustrating too.

I'll be using my inspector's report for this property as a template for the homes I'll be looking at this weekend.

I'm still getting my farm, just not this particular farm.

caveat emptor

[debk]

Not enough it seems.
 

Probably.

I'll be using my inspector's report for this property as a template for the homes I'll be looking at this weekend.

I'm still getting my farm, just not this particular farm.

caveat emptor

Are you still going to be looking at foreclosures?

Either way, ask your agent if there are any prior mls briefs on the property. If there are, you want printouts of them. Often times, you can find out in old briefs when stuff was done on the property....roof/HVAC/plumbing/electrical replacement, any updating or renovations done to the property.

Most agents are not going to "represent" major work being done on a property, without asking a lot of questions of the seller - or taking information from the property disclosure that the seller fills out at time of listing, when filling out an mls brief. We can get into too much trouble if we do.

The way I understood the new rehab loan on foreclosed properties, was that the HUD/FannieMae, is supposed to already know what the problems are, and the repairs for everything structural/operating systems is included. All cosmetic stuff may not be, but major stuff is supposed to be. (We were given the info at a company-wide seminar back in late Jan/early Feb)  Obviously, with what's happened to you....that is not true, or at the very least, the reports on the properties are not thorough....

Good luck this weekend on your search!

[Alpha Mare]

I had an FHA loan on my NC house.  They wouldn't accept a cash down payment(20%), they actually told me how to create a false paper trail .  At the last minute they decided ALL of the 16-pane windows (26) had to be reglazed, inside and out. I busted my scawny ass to get it done- and they never came back to check. But never said a word about the bare electrical wiring. Asshats!
I sold it 8 years later for twice what I paid.