Carrie, Home Buyer in Rochester Hills, MI

Pipes burst in foreclosure home . . . FHA inspection won't pass????

Asked by Carrie, Rochester Hills, MI Tue Jan 27, 2009

I am trying to purchase a foreclosed home with pipes that had burst. I am working on getting an FHA Renovation loan to cover other things in the home (to replaced drywall and flooring that the bank removed due to the pipe burst). The bank doesn't want the water turned back on (shut off at street) in case there are more leaks. There is actually some confusion about if the original pipe burst was even repaired. How can an FHA inspection pass if the water is not turned on? I am more than willing to pay for all repairs but don't want to do it prior to closing in case underwriting comes back and tells me I am denied for some reason (then I just repaired a home that is not mine). How can I get the bank to fix the pipes prior to closing with the agreement that I will repay the cost of the pipes that had to be fixed so that the FHA inspection can pass? I am afraid these darn pipes will be a deal killer.

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5
Brian is correct. I am doing a FHA203 loan right now with John Adams Mortgage Company ( David Kaner-248-855-8800) and that is exactly the same scenerio) If I can be of any further assistance please call me at 248-613-1935 or visit my web page at http://www.novetsky.com
Web Reference: http://www.novetsky.com
0 votes Thank Flag Link Tue Jan 27, 2009
Carrie-
What you are working on are the what if's... yes you are trying to prepare yourself for the worst but make the calls now with those involved with your loan and representation to get the right answers. You can get advise from those of us that may have had a similar experience but you need to get the answers to your case NOW. CAll your mortgage lender and call the agent that is representing you. Make sure you are all on the same page and know what your plan of remedy is if there is one. FHA 203K loans are much more detailed and you have to be aware of what are the remedies in YOUR case. Check with your mortgage representative if you can even include burst pipes in your rehab. If you are not able to do that you may need to find another property.
Web Reference: http://www.lizindetroit.com
0 votes Thank Flag Link Tue Jan 27, 2009
Carrie,

You sound as if you have a fairly good understanding here. I question whether there is an estimate of damage and cost estimate for repair here. Also, if your mortgage is a FHA203K already, consider adjusting the price downward to the bank while you add on the post closing cost of plumbing repairs anticipated. If the bank is unwilling to allow for a complete inspection of the plumbing it may be necessary to be very liberal in your estimate of future repair expense. You have negotiation challenges with the bank and your lender. Hope it works out and also hope my answer is somewhat helpful. We just had a pipe burst in our condo listing in Auburn Hills last week and will be dealing with the same thing. Your situation with a foreclosure might be better than ours...a short sale scenario. Good Luck!

Kay Pearson
Max Broock ~ Real Estate One
248-860-0366
kaypearson@maxbroock.com
Web Reference: http://www.KayPearson.com
0 votes Thank Flag Link Tue Jan 27, 2009
Carrie:
When the estimates are given from the contractors as part of the renovation loan escrow money, they will likely take this into account and plan for the "fix" as part of your quote. Your lender should be able to guide you on this...
Regards,
Brian Luck
Keller Williams Realty
Web Reference: http://www.HomesMacomb.com
0 votes Thank Flag Link Tue Jan 27, 2009
At this particular time home may not pass for any inspection for buyers. Could be bank will now only take a cash buyer. Not recommend purchase a home unless you can obtain require inspection it can be costly. If the water damage "sitting around" are there now mold issues? You might want consider continue search for another property till bank resolves these issues.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Tue Jan 27, 2009
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