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With FHA comes new rules and new problems!!

By
Real Estate Agent with Exit Realty Properties

I have a lovely buyer who is due to have her first baby in May, 2008. I have been working with her for three months and I finally found her a lovely home and she qualifies for FHA mortgage. Evrything seems to be goining smooth until 2 weeks to our proposed closing and the mortgage broker informs us that the building is not FHA approved. Why are we being told this two weeks to closing? Why didn't the mortgage broker pick it up when we started the process? Why didn't the appraiser who was supposed to be "great" at what he does pick up on it? My buyer had already spent money on an appraisal and inspection ($450) which she should have in her pocket. Needless to say, she can't go through the stress any longer as the baby is now kicking constantly.

 Funny things happened during this entire process though. As I started to do whatever it took for my buyer, I did investigate this and called the HOA. they required $150 to complete any questionnaire for a "spot approval". I then asked for the President of the HOA who turned out to be a realtor with over 20 years experience in the business. We asked her if the following was in the condo docs "First right of refusal". To my amazing surprise, she didnt know what I meant and no matter how much I tried to explain it, she didn't know. How does she run the HOA and her RE business if she doesn't know basic stuff like this?

 We all need to get educated on FHA loans since it is the newest loan out there. Don't get caught when it is too late!!

Afie Makinde

484-410-6569

Susan Davis
Austin, TX
Excellence Advocate

Yes you do need to get informed. there are many things to know about them and they may not be the best choice for your buyer. Dont just leave it up to the Mortgage Lender, a lot of them dont what all the guidelines are either!

To your success,

Susan

Mar 19, 2008 02:09 PM
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes
Hi Afie this is the second time I have heard this happening to someone I had no clue before recently that a condo building has to be approved in order for someone to get FHA funds.
Mar 19, 2008 02:10 PM
JEROME G
White Plains, NY
Yikes.....oh well! I hope your client deliver the baby with no stress. I hope things get better.
Mar 19, 2008 02:12 PM
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics
Afie- Sorry that happened to you, I like to keep up on all sides of the sale but sometimes you think you can trust a lender or another agent and they drop the ball!  Go get the next one!
Mar 19, 2008 02:13 PM
Anonymous
Robin Sherman

Having run into a similar situation after many, many, many transactions I asked my 70+ year-old broker/mentor how many transactions I would have to have under my belt before I had seen it all. Her response was that I would never have enough transactions to have seen it all; that in her long career she still had surprises. Her advice was to take as many continuing ed classes as possible and network with your "support team" (lenders, home inspectors, appraisers, etc.) on a regular basis as they had a lot to teach me.

Condo buildings always have to be approved, and not just for FHA loans. Look at it this way, it was a tough lesson to learn and your client is also paying a price for the lesson, but it WILL make you a better Realtor.  I bet you will find her a better match without the pressure of an upcoming delivery.

Mar 19, 2008 02:28 PM
#5
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI
Afie, type in the words "HUD approved Condos" in Google and it will bring you to a site that gives you a list of approved units.  I do this with all of my FHA buyers if they are interested in a condo.  If a particular complex is NOT listed I then ask the mortgage lender about spot approvals.  Doing this saves much time and expense as you found out.  Sorry this happened to you. 
Mar 19, 2008 09:32 PM
Afie Makinde
Exit Realty Properties - Coral Springs, FL
Realtor, Broward County, FL

Thanks to all of you for such wonderful comments and advice. My buyer is now moving into a rental that I found for her and in one year, she will have saved enough to buy a home and I would have gotten as much education as possible under my belt.

 

Thanks Kris, now I know how to find approved condos. In my case, this condo building was once approved and no longer. With spot approval, someone (buyer) seems to have to pay the 150 that they demand to complete a questionnaire.

 

Many thanks all.

 Afie Makinde

Mar 20, 2008 04:59 AM
Anonymous
KATHY MCGRATH

THE MORTGAGE OFFICER SHOULD HAVE CONTACTED AN FHA APPPROVED APPRAISER TO DO THE APPRAISAL FOR AN FHA LOAN WITH A CASE NUMBER. THE PROBLEM STARTED THERE. THEN IT IS ALWAYS GOOD TO ATTEND THE APPRAISAL FOR AN FHA LOAN AS A BUYER AGENT, ASK IF THEY HAVE A CASE NUMBER AND FIND OUT IF THEY WILL BE REQUIRING REPAIRS SUCH AS PEELING PAINT FOR PROPERTIES BUILT BEFORE 1978.

May 19, 2008 12:28 AM
#8
Anonymous
H

Is First Right of Refusal an obvious question to answer before having to pay for the questionnaire?

Jun 17, 2008 05:50 PM
#9
Anonymous
steve

Typical realtor looking to blame the mortgage lender and appraiser for her lack of knowledge.  You are in Florida (tons of condos) and this is the first time you found out that a condo must be approved????  I can only assume that you are new to the business

Jul 18, 2008 03:32 AM
#10
Anonymous
chris whirlow

you do your client a disservice to not know about FHA Condo guidelines, do yourself a favor and study up on them.

Jul 01, 2009 02:53 AM
#11
Anonymous
Stephanie

The mission of the Office of Housing is to:

 

Contribute to building and preserving healthy neighborhoods and communities;

 

Maintain and expand homeownership, rental
housing and healthcare opportunities;

 

Stabilize credit markets in times of economic disruption;

 

Operate with a high degree of public and fiscal accountability; and

THIS MISSION STATEMENT IS NOT OCCURING!!!!

PLEASE READ IN FULL: I need help!

 

I live in CA. Where my house is being bought from a buyer that has been approved and is ready to fund for an FHA loan thru her local wells fargo bank in CA.

 

The lender was in the process of sending to get the final loan documents, when they pulled their final checks and went to a website called www.epls.gov  (excluded Parties List System).

 

According to the lender, if any one in the transaction, whether on the buyers or sellers side, shows up on this list...then the FHA loan CANNOT be funded.

 

My name is xx. I was a Physician Assistant that surrendered my license in the state of CA. Based on that voluntary surrender, I was exempt from seeing Medicare and Medical patients. Therefore, on July 18, 2009, I was added to this list to state that fact. NOTHING TO DO WITH MORTAGE or MORTAGE FRAUD or ANYTHING TO DO WITH FRAUD!

 

The lender continues to state to the buyer, that if my name is not cleared off the list, then she can not receive the fund for to purchase the property from me.

THIS CANT BE RIGHT... Is the FHA LOAN office/govt. saying that they will not allow Wells Fargo use their money to Fund a citizen that is ready and able and willing to help the economy move forward and purchase a home.

 

Is that buyer to be penalized because she cannot buy the home of her dreams.

I am suppose to be penalized and never more forward in life because of a situation that evolved and was never proven in a court of law to be true...and yet, here I am trying to do the financially responsible thing, unload debit and clean up bills... BUT I CANT because, my buyer can not get the fund for HER LOAN because my name is on a list.

 

THIS DOES NOT MAKE SENSE....

 

A lot of lives are on hold right now due to this situation, which was foreseen due to the fact that how could one...know...or even understand that there was such a list.

I mean it makes sense...to check it, to see and if a person has a REALATED problem in RELATED field, but this is not the case AND THEREFORE, there must be a way to be exempted AND A WAY TO ALLOW THIS LOAN TO BE FUNDED.

 

PLEASE help me get into contact with that right people to help me figure it out...ASAP.

 

Stressed and angry and sad,

 

Kristine

 

BELOW ARE THE CODES FOR ME THAT COME UP AND AS YOU CAN SEE THEY HAVE NOTHING TO DO WITH FHA LOAN AND NOTHING TO DO WITH ME RECEVIEING FUNDS FROM AN FHA LOAN

  

  

  

  

Cause:

Excluded by the Department of Health and Human Services and all other Federal procurement and nonprocurement programs. In addition, for exclusions imposed on or after August 5, 1997, the scope of the exclusions encompasses all Federal health care programs.

Treatment

For exclusions imposed prior to August 5, 1997, the scope is limited to the four health care programs specifically referenced above. For exclusions imposed on or after August 5, 1997, the scope includes all Federal health care programs. The effect of an exclusion is that payment may not be made by the programs for any items or services furnished (except an emergency item or service) by an excluded party. If the party is a physician, payment may not be made for any items or services furnished, ordered, or prescribed. Contact the Health and Human Services liaison shown under the heading "For Additional Information" in the front of this issue is you need specific information concerning listed parties.

TOP





Z2

 

Cause

Debarment by U.S. Office of Personnel Management from participation as a health care provider in the Federal Employees Health Benefits Program (FEHBP), under the authority of 5 U.S.C. 8902a and implementing regulations at 5 CFR Part 890, Subpart J.

Treatment

Debarred providers are prohibited from receiving payment, directly or indirectly, from FEHBP funds for items or services furnished to an employee, annuitant, family member, or former spouse covered by a health benefits plan described by 5 U.S.C. 8903 or section 8903a. OPM debarments are effective throughout all other federal agencies' procurement and nonprocurement programs. Debarments are for a specified period as determined by the OPM. However, all termination dates are listed as "Indefinite" (Indef.), because OPM must approve a reinstatement application before the provider may resume participation in the FEHBP.

Dec 05, 2009 02:28 PM
#12