August 19, 2017

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FHA Appraisal Problems: A Reader Question

We’ve gotten a variety of questions in our comments section this week about issues connected to the FHA appraisal process. Here’s the latest:

“I have an FHA loan. It started raining on the day of the appraisal and we noticed a leak in the basement. The sellers agreed to fix the drainage issue that was causing it. During the walk-through we noticed that instead of busting out concrete and installing drainage pipes that they patched it up with more concrete. As ugly as it was I was okay with it as long as it kept the basement dry.”

“Fast Forward to the first rainy day after closing on the home and I have an all out flood in my basement! My realtor said that there is nothing that can be done because they made an ‘attempt’ to fix it. That sounds like a racket to me but what do I know. Is my realtor right? Or is there a way to get the sellers to come back and do it right? If so, then where do I begin?”

“There are other agreed upon repairs that the didnt fix either but this is the one that wouldve made me cut my losses. Its not just a simple matter of digging and installing pipe or I would do it myself. There is thick concrete all along the backside of house that will need to be jackhammered.”

There are many unanswered questions here including what was recommended by the appraiser in terms of corrections, etc. Another unanswered question is whether or not the buyer paid for a home inspection, which is a far more complete review of the property than an FHA appraisal.

In any case, the questions here are really of the legal variety. We cannot and do not give legal advice on this blog aside from “Get a lawyer.” Anything on this matter beyond what is quoted in the FHA loan rule book, HUD 4000.1, is generally outside the scope of this blog.

When there are legal questions about any home loan transaction, the laws of your state will apply, and those laws differ greatly depending on the state and other factors.

In cases like these, depending on severity and other variables, getting a consultation with a lawyer with real estate law expertise or related experience is likely a very good first step rather than a last resort.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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