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It is great to be
back in Utah. This week has continued to be as busy as ever. It
was capped off with a Father and Sons outing with my 5-year-old
Adam. Adam loves to camp and fish. We were able to do both. We
had everything from heavy rain to sunny and bright skies, but
the spirits never dampened.
I have spoken with a couple of Inspectors this past week who are struggling to keep the inspections rolling in. Today's MMM is especially for them. For those of you who are already booked up, you will probably not need to pursue the added FHA avenue of income. Those of you looking to increase your inspecting volume have some new FHA regulations to help you out. Now the question is whether or not you are going to do anything about it. Are you going to market heavy to the lenders and announce to them proudly that your AII™ training and credentials are exactly what they are looking for? Your other option is to sit back and do nothing, hoping that they will figure this out on their own and your phone will ring.
FHA
INSTRUCTIONSIn timely manner, Bill Ball just posted to our AII™ Inspector Hotline.....
The following are the instructions on the NEW form, (August, 1999), for FHA/VA Appraisals:
"All required repairs must be
completed in a professional manner, in compliance with HUD's guidelines
and satisfied prior to closing. The lender is responsible for
coordinating repairs. A professionally licensed, bonded, registered
engineer, licensed home inspector or appropriately
registered/licensed trades person, as applicable, must provide
documentation that all deficiencies have been acceptably corrected
upon completion of repairs."
The appraiser is required to fill
out what looks mighty similar to a HI report on the condition
of the physical components of the home including:
* Site Conditions
* Grading and Drainage
* Pest & Dryrot
* Structural Conditions
* Foundation
* Roofing
* Mechanical Systems, including:
+ Furnace and Heating system
+ A/C
+ Electrical System
+ Plumbing System
QUESTIONS the appraiser must answer
include:
1). FURNACE = "Unit shuts down before reaching desire temperature?"
2). ELECTRICAL "Outlets function = check representative number?"
3). ROOF: "Roof life less than two years*?"
*HUD/FHA requires that the roof have at least 2 years remaining
life. If the roof has less than 2 years remaining life, then the
appraiser must call for re-roofing or repair. The condition must
clearly state whether the subject is to be repaired or re-roofed.
FHA will accept a maximum of 3 layers of existing roofing. If
more than 2 layers exist and repair is necessary, then all old
roofing must be removed as part of the re-roofing.
The PROBLEM is, of course, that there are no published standards by which an appraiser can make the required judgments.
There's new business here, don't you think?
LOOK for a White Paper on this topic, (if you're an IFN subscriber), that will be mailed before the Annual Meeting -- at which there is going to be a seminar on this topic. Bill Ball - Las Vegas, NV
NEW
HUD FORMIf you liked Bill Ball's remarks about where a new source of income can be found, then you will love this. A fantastic new form has been introduced by HUD that is to be used for each and every FHA residential loan. It has been in the works for quite a while now. Although it does not make a Home Inspection mandatory, it does clearly define the difference between the Appraisal and the Home Inspection.
The form is to be read and signed by every FHA loan applicant. I have replicated the text here, but the actual downloadable form can be found at:
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US Department of Housing OMB Approval No:
2502-0538 For Your Protection: Get a Home InspectionName of Buyer: ___________________________________________________________________________________________
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What the FHA Does for Buyers... What we do: FHA helps people become homeowners by insuring mortgages for lenders. This allows lenders to offer mortgages to first-time buyers and others who may not qualify for conventional loans. Because the FHA insures the loan for the lender, the buyer pays only a very low down-payment. What we don't do: FHA does not guarantee the value or condition of your potential new home. If you find problems with your new home after closing, we can not give or lend you money for repairs, and we can not buy the home back from you. That's why it's so important for you, the buyer, to get an independent home inspection. Ask a qualified home inspector to inspect your potential new home and give you the information you need to make a wise decision. Appraisals and Home Inspections are Different As part of our job insuring the loan, we require that the
lender conduct an FHA appraisal. An appraisal is different from
a home inspection. Appraisals are for lenders; home inspections
are for buyers. The lender does an appraisal for three reasons: Appraisals are not home inspections. |
Why a Buyer Needs a Home Inspection A home inspection gives the buyer more detailed information than an appraisal--information you need to make a wise decision. In a home inspection, a qualified inspector takes an in-depth, unbiased look at your potential new home to: *evaluate the physical condition: structure, construction,
and mechanical systems What Goes into a Home Inspection A home inspection gives the buyer an impartial, physical evaluation of the overall condition of the home and items that need to be repaired or replaced. The inspection gives a detailed report on the condition of the structural components, exterior, roofing, plumbing, electrical, heating, insulation and ventilation, air conditioning, and interiors. Be an Informed Buyer It is your responsibility to be an informed buyer. Be sure that what you buy is satisfactory in every respect. You have the right to carefully examine your potential new home with a qualified home inspector. You may arrange to do so before signing your contract, or may do so after signing the contract as long as your contract states that the sale of the home depends on the in |
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I understand the importance of getting an independent home inspection. I have thought about this before I signed a contract with the seller for a home. X_____________________________________________ X________________________________________ Form HUD-92564-CN |
This should make a lot of you jump for joy. It should provide an exceptional marketing angle for those looking for more inspections. The lenders are out there wondering who they are going to find to do the inspections. They are not going to find you by osmosis. Lenders are either devoted or fickle and they will either develop an allegiance to you and only you, or they will discard you in lieu of the next Inspector. Why not develop quick allegiances to you???
All of this information is timely to me because I have been asked to be the main luncheon speaker at the Mortgage Lenders Association this coming Thursday afternoon. I did not seek them out, they called me..... It was the allegiance thing, I guess. I have a half-hour to represent our industry and explain to them the ramifications of the new FHA guidelines. The agents and lenders are under the impression that they will have to steer their clients to conventional lending programs because they can't figure out the added steps for the FHA loans. I have taken it upon myself to be able to describe the program in easy terms so that they will not shy away from the added steps. The luncheon presentation will be one more boost for our profession. It should be a lot of fun.
I look forward to your feedback about your experiences of tapping into the FHA market...... Don't let this one pass you by!
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AII™
Web Site: www.INSPECTION.org