Foreclosure in Lansing>Question Details

Ak, Home Buyer in Lansing, MI

Mold damage and FHA / HUD requirements...

Asked by Ak, Lansing, MI Mon Apr 20, 2009

I'm purchasing a bank-owned home with some water damage, via 203k loan in Michigan. I already expected the obvious repairs of plumbing, drywalling, flooring, etc. The problem is there is a substance on walls (mold, mildew, whatever). Inspector told me he would not be including that in the write-up because FHA / HUD does not require him to. My realtor told me the appraiser might write it up & lender might require me to correct it. Inspector says the appraiser should not write it up either because they follow the same federal guidelines.

Inspector said an air test can be done for about $200. Yet, a restoration company said air test alone is $2,000.00 and he estimated $35,000 for mitigation. This would cause me to not be able to afford the home. I know I should not be emotionally attached to it, but I am, and the thought of losing it is just devastating. General Contractor said he would just buy abatement chemicals, masks, etc. and treat it.

What are my options??
Thank you

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Answers

8
Elliot Environmental.
This company will give you striaght answers when it comes to mold problems. I have referred them several times to my clients with great results. Give them a call or email it's free to have them answer questions.

Gail
0 votes Thank Flag Link Mon Oct 19, 2009
Thank you for your time, but that was just a statement of the obvious. I have already been searching the internet extensively and not found the information I am looking for. I have opened this question up for assistance from people who are familiar with handling of FHA loans and mold related transactions.
0 votes Thank Flag Link Mon Apr 20, 2009
"I am looking for more clarification on what the federal guidelines actually are, since I am getting conflicting information from the inspector and agent."
The above wanted information from your previous entry is one you could research easily online...but, be careful, interpretation should only be left to the professionals...in this case a lawyer.
0 votes Thank Flag Link Mon Apr 20, 2009
You must consult your legal rep and your agent on this. I am not an attorney, and I am not a licensed agent in your state. But in my opinion, you can always ASK per an addendum...without any threating terms of backing out...and see if they accept (so long as you are within the designated time frames to do so---see your agent for info on this)..
If they do not, and you really want THIS HOME----that is a situation you will need to see if your loan type will allow for, if not and if you cannot change it, you should consult with your agent and an attorney (again).
So, basically, you can try to ask and should do so without threatening cancellation.
0 votes Thank Flag Link Mon Apr 20, 2009
Well I have the feeling that this particular bank may be a bit greedy. From the beginning I had bid above their asking price, yet they countered asking for even more. I accepted because I had seen other people being shown the house (and there are flippers in the area with cash on hand, snatching up properties). I've also heard that the market is picking back up in this area.

I definitely do not want to back out or risk losing it. If the bank does not really care about losing my offer should I still ask for more terms? Would they just say no or could they cancel the deal?
0 votes Thank Flag Link Mon Apr 20, 2009
AGAIN: Let me preface this with the fact that I am not a lawyer nor an agent in your state and you should seek advice from someone who is legally licensed to give advice of this nature in your state.However, as an outside reference of what typically is done here in Las Vegas in this situation.......
Banks want to sell their properties.... they make $0 holding them and those that they are forced to hold (while on market) have a chance of being vandalized.
I am an REO agent here in Vegas. I have seen banks reduce price, give repair costs and do hold backs. If your state is not experiencing this, there is TONS of demand in your state and the banks do not care about if they lose your offer.
As-is is a contract term...your contract allows you time to do your inspecitons and back out or REQUEST MORE TERMS (due to inspections) if necessary....I have told you the MORE TERMS to ask for. Let me know your thoughts.
0 votes Thank Flag Link Mon Apr 20, 2009
The home has been clearly stated as "As Is" from the beginning. So I doubt the bank would be open to paying any of those costs. I am looking for more clarification on what the federal guidelines actually are, since I am getting conflicting information from the inspector and agent.
0 votes Thank Flag Link Mon Apr 20, 2009
Let me preface this with the fact that I am not a lawyer nor an agent in your state and you should seek advice from someone who is legally licensed to give advice of this nature in your state.However, as an outside reference of what typically is done here in Las Vegas in this situation: If your mortgage company cannot complete loan due to conditions which must be fixed per appraisal report, then your agent writes an addendum to REO bank (aka Seller) to either: 1.) have bank make the repairs at bank's cost prior to COE (may also, in same addendum, ask for extention to COE to allow for the time this will take) or 2.) have bank allot a certain amount of money out of their net proceeds for what is called an "escrow hold back" to make repairs after COE from that escrow account (if acceptable to your lender & lending program). Hope this helps.
0 votes Thank Flag Link Mon Apr 20, 2009
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