Friend of mine going thru HUD...any ideas??? - InspectionNews

Brian Thomas · #1 (**permalink**) 05-22-2009, 09:55 AM

Here is an exerpt from his email:

So, my fiancee and I are currently in the process of buying a house through HUD. The house has been abandoned for over 2 years. We got a good deal on it (we hope). I have been approved for the loan, but they will not let us move into it until 2 things are doneor repaired on it. The basement walls need to be redry-walled and there's a "water leak" somewhere on the premises. My mortgage loan representative states that as soon as we fix these problems, we can sign to close it. The problem we're having is that the house is not "officially" ours. We haven't signed any papers closing on it. However, they're wanting us to come in and fix it, when we don't even "own" it yet. Does this sound right or is this how the process goes through HUD? We're just concerned. We don't want to pump all this money into fixing it, then HUD comes out and decides they want something else fixed on it, which then pushes us back on our closing date. I mean, is there any type of documentation out there that we can sign saying that the house IS ours? Or some type of reinbursement clause for the money we put into it if somehow we don't get it? Or are these people just taking me for a ride?

I dont know a great deal about HUD but it is my opinion not to pay to fix anything on a house that isnt officially yours. If the deal falls thru for whatever reason, you basically paid to fix someone else's house. Any ideas would be appreciated! Thanks[/font]

Jim Luttrall · #2 (**permalink**) 05-22-2009, 12:25 PM

This sounds screwy, but then lots of things done by HUD are screwy IMHO.
Have your friends talk to an attorney to protect themselves. I have heard of LOTS of deals falling through due to technicalities right at closing. Mortgage folks, appraisers, underwriters are all running scared and will balk at trivial infractions. No way that "I" would be doing repairs on a HUD owned property.

Scott Patterson · #3 (**permalink**) 05-22-2009, 12:25 PM

I don't see why or how you would even want to consider making repairs to a home that is not yours. HUD, just wants to get the home off their books. Your lender is the one that will not be able to underwrite the loan apparently until the repairs you noted are made.

HUD will not make the repairs so it is up to whoever buys it to make them. Bottom line is that you need to move on to another home that you can get a loan on.

Jerry Peck · #4 (**permalink**) 05-22-2009, 12:46 PM

Quote:

Originally Posted by Scott Patterson

Bottom line is that you need to move on to another home that you can get a loan on.

Or have them tell the bank that if they want to move that house, the bank will make the loan and withhold the funds for those repairs in escrow to be released when the repairs are completed.

The cost for those repairs should not be that much, and, with a bank like that, I would be inclined to let the bank spend their money tracking that escrow account and sending out monthly statements for a very long time - all that idiocy costs them money, let them regret it.