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I'm asking this to hopefully help an elderly friend who is trying to sell their house.
They recently got their house appraised and the appraisers screwed up and even though they corrected their mistake, the bank will not give a loan to the buyers because of the mistake. The appraiser mistakenly stated that there was a problem with the foundation. I think something was mentioned about the floors and walls needing repainting and reflooring. The bank says the floors and walls need work before they will give a loan.
As of right now, the buyer is trying to get some sort of special loan where I think they have to fix up the house before buying it. I don't understand it but the end result is that my friend will not be able to buy a house for 2-3 months (the time it will take for the buyers to get the loan) and instead will have to rent which is an incredibly huge problem. It would be better all around if the bank would just give the loan right now. Is there a way to get around the mistake the appraisers made? Even though they fixed it, the bank is acting like they didn't. Is that even legal? What if the buyers just used another bank? Can they do that? I'm sorry I don't have more information, a lot of this stuff goes right over my head. I'm just trying to help my friend who is on the verge of a nervous breakdown.
Why would your elderly friend need to rent a home when she still has hers?
Why is the appraiser also doing an inspection, is that common where you are located?
Why is an elderly person in a rush to buy another home after selling one? Wouldn't they be better served by renting anyway in the current market?
Between closing costs on selling the current home, closing costs on buying another home and the projected rate at which that homes value would increase, this all really doesn't make too much sense for an elderly person.
Normally an appraiser does not have the expertise to say if structure is sound. Even an inspection for an FHA loan would not by itself have determined this, though it appears that the buyer may have been going down the FHA path and now needs to switch to 203k program of FHA...
I can think of no reason that seller would need to move out, and it would be unwise to do so unless the buyer has agreed to additional constraints.
The lender / bank did not "screw up" if the house did not meet FHA standards, if anything the seller's real estate agent ought to have known that certain condition minimums are required by FHA, and by agreeing to accept a buyer with that kind of financing the deal can be delayed... For this reason when I would advise sellers about an FHA financed buyer it was standard procedure to seek offers to back up ...
Nothing illegal here at all.
Odds are that the buyer does not have enough down payment for a regular loan, so switching lenders does no good.
Friend should be getting these questions answered by their agent, picking a good one should have been their priority and would prevent nervous breakdown...
Still lots unanswered, but if you have details about why your friend needs / wants to sell now, with market still poor in most parts of country, and would need to rent / move out, I and others would gladly provide our advice.
First, there are lots of lenders around. They can start over with another one. But I agree 100% with Chet that this is a bad time to be selling.
I'd look into a reverse mortgage. Maybe they can pay off their current mortgage, stay in the house and not have a payment. With some luck, maybe even cash out some money for living expenses. There are some scams out there but a bunch of reputable one like Wells Fargo that do these loans. Lots of information about them on the AARP web site. The big caveat is that they have to be living at the home. I'm like the others and don't get their situation.
Agree, we need more info. Sounds like the buyer was trying for an FHA loan. FHA appraisers will check certain safety requirements are met and note safety problems in their report. Structural damages such as caused by foundation issues are required to be repaired.
The FHA appraisal report will be kept on record for 4 months, so switching to another lender probably won't help. The alternative loan the buyers are trying to get is an FHA 203K rehabilitation loan that will provide funding for repairs.
If the appraiser corrected the mistake, not sure why the lender is still concerned. Was the correction presented to the loan underwriter? What does the lender rep say about the mistake? I would think the buyers would have pushed to get it corrected instead of going through the hassle of a 203K loan process.
If there really isn't a problem I would think a letter from a foundation contractor would satisfy the underwriter. For FHA flooring is required in all parts of the house. Subfloor can't be exposed.
Frequently the appraisal is "blamed" if a lender doesn't want to do the loan for whatever reason.
That would never happen!!
(PS. you are missed at BH)
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Just like "telephone game"...
