Michael G. Branson Edited by 
Cliff Auerswald 43 commentsBy Michael G. Branson Edited by Cliff Auerswald 43 comments
Getting a home appraisal is an integral part of the reverse mortgage process. Here’s what you need to know to manage your expectations about getting your home appraised as part of this loan to help you age in place.
It’s a multi-step process, but you can prepare in advance to make it as smooth as possible.
Typically, there will be three steps:
Once the appraisal is in hand, the lender can determine the amount you will be eligible to receive from your reverse mortgage loan.
The appraisal process has recently changed to introduce appraisal management companies (AMC) that typically handle much of the coordination and communication between appraisers and homeowners. They are the ones who accept the appraisal fee and then pay the appraiser for that fee to prevent the homeowner from paying the appraiser directly.
Part of the role of “AMCs” is to ensure the valuation is uncompromised—in other words, there is no interaction between the appraiser and the lender to manipulate the valuation in favor of getting the valuation to a certain level.
You can do a few things in advance to help prepare for the appraisal and manage your expectations accordingly. Many homeowners today look to online tools such as Zillow and Redfin , which offer estimates of home values for online users. However, it’s important to recognize those estimates are merely that and should not be taken for fact. The only way to get an actual valuation of your home is through a licensed appraiser.
Remember that the real estate market may have shifted dramatically since the last time your home was sold, and its value may have changed substantially. By being realistic about these changes, you can better manage your expectations for receiving your appraisal.
The appraisal fee, which currently runs between $450 and $550 depending on where you live, is paid to the AMC. The AMC will work with the appraiser to coordinate an appointment with you. Once you have ordered an appraisal, it can take 15 to 30 days to complete the process, including scheduling, the appointment, the research, and the final valuation.
Homeowners do have the opportunity to appeal an appraisal if they feel the valuation is way off base. However, only in a very small percentage of cases will an appealed appraisal result in a new valuation.
A critical step when applying for a reverse mortgage is the home appraisal. This process assesses your home’s value, which is crucial for determining your loan amount. We have compiled a thorough checklist to help homeowners navigate this process smoothly.
Preparing for an appraisal might seem daunting, but with the right checklist, you can ensure your home is showcased at its best. Addressing the mentioned areas can significantly smooth the appraisal process, leading to a more favorable assessment of your home’s value.
Download our appraisal PDF checklist here for a detailed breakdown and more tips on preparing for your home appraisal.
Yes. A complete FHA appraisal is required to obtain a reverse mortgage. In some instances, a second appraisal can be required as well. It is at HUD’s sole discretion whether a second appraisal is required. If two appraisals are required, the lower values will be used for the reverse mortgage calculations. Proprietary (Non-HUD insured reverse mortgages) can also require two appraisals, but only when the home is at or above $2 million.
No. All loans, including reverse mortgages, must adhere to Federal Appraiser Independence guidelines. Those guidelines stipulate that neither the homeowner nor the lender can select the appraiser who appraises the home. An independently selected qualified appraiser must perform it.
The Department of Housing and Urban Development (HUD) sets the timeframe for the effective dates of documentation related to the Home Equity Conversion Mortgage (HECM) reverse mortgage program. Currently, appraisals are valid for 180 days. Previously, the validity period was 120 days. HUD also once allowed a short extension at the underwriter’s discretion. Should market values start to decrease or if the market becomes unstable, HUD may revise its parameters to a different timeframe in the future. However, as of now, appraisals are valid for 180 days.
Appraisal costs will vary widely depending on several factors. The location, home size, value, and land amount influence the appraisal cost. Larger homes, larger lot sizes, and rural properties have higher appraisal fees due to the complexity of the assignment. To determine the approximate cost for an appraisal of your home, you would need to obtain a quote from a lender.
A homeowner is permitted to challenge the result of an appraisal. You can submit a request for reconsideration of value if you have 3 recent comparable sales that you feel are more comparable than the ones used by the appraiser. The appraiser must review those comparable sales presented and either utilize them or address why they cannot be used as comparables. If there are no additional comparable sales, there is no recourse for a simple disagreement with the appraisal, as the guidelines do not permit you to obtain another appraisal until the initial appraisal expires. Once the appraisal expires, you can start the loan application again and obtain another appraisal.
Every FHA appraisal is tied to a specific Case Number and specific transaction. You cannot use one appraisal for another Case Number/transaction. The Case Numbers are assigned by the HUD portal online system, and then the reverse mortgage appraisals are delivered back to HUD before the lender. To summarize, you cannot use an existing appraisal, FHA or otherwise, for a new reverse mortgage loan.
Yes. The fee for a reinspection can vary depending on factors such as what needs to be inspected and your geographical location. The cost may increase if you are situated in a remote area due to substantial travel time.
You must still pay for the appraisal even if the reverse mortgage company declines your loan. The appraisal fee is paid to the appraiser or the appraisal management company to establish the value of your home, not as a guarantee of loan approval. This cost is not a fee to the lender, and lenders are prohibited from adding any extra charges to the actual cost of the appraisal. Like a non-refundable credit report fee, the appraisal fee is for the service performed, whether the loan closes or not. If the service (appraisal) is canceled before being performed, you may be eligible for a refund. A full refund should be issued if the appraiser has yet to start their work. If the appraiser visits the home but still needs to start the actual appraisal, they might charge a trip fee. Lenders must legally disclose all closing costs before any service is paid for. If your loan is declined due to eligibility issues or changes in loan terms and you were informed about the fees beforehand, the lender has complied with lending laws. However, if the lender decides not to proceed with the loan for other reasons, you could discuss the possibility of a refund with them. Lenders and investors may work with borrowers regarding outstanding costs when a loan becomes unviable, but this does not guarantee a refund.
Under the HUD appraiser independence rules, neither the loan originator nor the borrower is allowed to select the appraiser. However, if an appraisal management company assigns an appraiser with whom you are familiar—either through personal knowledge or due to their reputation—and you are dissatisfied with their selection, you may refuse their choice and request a different appraiser, provided you do so before the appraiser schedules an appointment or arrives at your property. If you consistently reject multiple HUD-approved appraisers, the management company may decline your request, and the lender might inform you that they cannot proceed with your loan application. It’s common for individuals to value their own homes more highly than an impartial third party might. Even professionals with experience in valuation and appraisal, including myself, have disagreed with appraisers’ valuations of their own homes. Unless the negative reviews you’ve encountered indicate serious professional shortcomings (such as missed appointments, excessively delayed assignments, or lack of professionalism), consider that most appraisers face criticism for valuations that don’t meet the owners’ expectations. Requesting a different appraiser might delay your loan process, particularly in areas with limited FHA/HUD-approved appraisers.
No. Lenders prefer higher appraisals for reverse mortgages for several reasons: it increases the amount borrowers can receive, reduces the likelihood of loan cancellation, ensures sufficient funds to clear any existing liens, and generally results in more satisfied homeowners. High appraisals are favorable because all loans are insured by HUD, which also prefers appraisals to match or exceed initial homeowner expectations. However, lenders cannot influence the appraisal process, a safeguard established after the 2008 mortgage market collapse to prevent inflated property values. Appraiser Independence Laws now prevent lenders, originators, and borrowers from discussing values with appraisers. With HUD reverse mortgages, appraisals are first reviewed by HUD to decide if a second appraisal is needed, ensuring values are not overstated. HUD requires its approval of the appraisal before lenders can issue loan approvals, aiming to protect against inflated appraisals, which caused significant losses between 2012 and 2018.
You can inform the appraiser about any recent improvements or upgrades to the property. It’s then the appraiser’s responsibility to decide if these upgrades justify an adjustment based on comparable sales. If comparable sales feature original equipment, the appraiser might apply a condition adjustment. For specific item adjustments, HUD requires appraisers to find sales with and without such features to support the value of the upgrades. For instance, comparing properties with and without pools or patios can help determine the value added by these amenities. However, it’s challenging for appraisers to quantify the added value of items like shutters or screens, as any adjustments would be subjective, and HUD does not permit subjective adjustments. Appraisals are a highly scrutinized aspect of the lending process. Many enhancements homeowners believe should increase their home’s value are often seen as personal preferences, which might translate to something other than higher appraised values. Even if such features could fetch a higher price in a sale, the appraiser must adhere to HUD property guidelines and rely on concrete sales data for adjustments beyond general condition improvements. This is because the appraiser must base adjustments on objective data rather than personal opinions or preferences without a direct buyer-seller agreement on value, as in a refinance transaction.
The decision to include an unpermitted room in the appraisal’s square footage rests with the appraiser. The unpermitted space must be workmanlike, comply with neighborhood and zoning restrictions, and have adequate, comparable sales to support additional value for the appraiser to consider. If the unpermitted room fails to meet these criteria, the appraiser might exclude it from the square footage calculations and could also account for potential tear-down costs in the value estimation, depending on the situation. Furthermore, if the unpermitted space does not meet HUD requirements, HUD might not approve the room in a property securing a loan they insure, such as a reverse mortgage. It’s advisable to consult with a lender about your specific situation if you have any unpermitted space. Depending on the details, the lender might find it manageable or make the property ineligible for a loan with HUD-insured financing.
No. Not only is the appraiser not given any details of the loan transaction, but the lender is also forbidden by law to discuss the valuation process with the appraiser. If it is a purchase transaction, the appraiser would know the purchase price, but that would be all.
ARLO recommends these helpful resources:
Michael G. Branson CEO, All Reverse Mortgage, Inc. and moderator of ARLO™ has 45 years of experience in the mortgage banking industry. He has devoted the past 19 years to reverse mortgages exclusively.
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43 Comments on this Article| Joy C. August 14th, 2024 |
Does the borrower pay for the appraisal up front, or is it deducted from the funds at closing? I had to pay for the appraisal when I got my first mortgage.
 | Michael Branson August 14th, 2024 |
Lenders typically require you to pay for the appraisal at the time the service is completed. The appraisal is a third-party service, and the appraiser's fee is due when the appraisal is completed, regardless of whether you decide to close the loan. If you change your mind, the lender would be responsible for covering the appraisal bill.
Borrowers can cancel at any time without a cancellation fee, but if you authorize an appraisal, the appraiser has already completed their work and earned their fee once the report is done. By law, they are entitled to be paid. Lenders face the risk of having to pay the fee themselves if the borrower decides not to close the loan, which is why most originators require the borrower to pay for the appraisal when it is ordered.
Some lenders, particularly larger ones, may use the appraisal as a way to hold onto the borrower. If the appraisal is completed by an appraisal company owned by the lender, the appraisal may become less portable. How does this affect borrowers? If you cannot close with the original lender or find a better deal with another lender later, your appraiser or appraisal company may not cooperate with the new lender. The new lender might need additional information from the appraisal, but the original appraisal company could refuse to work with them, preventing the new lender from closing your loan. Since an FHA appraisal stays with the property until it expires, this situation could prevent some borrowers from closing with another lender for up to four months. Many borrowers end up accepting less favorable terms from their original lender just to avoid excessive delays. What initially seemed like savings on a lower appraisal fee has cost many borrowers much more in the long run once they realized the terms they ultimately received were far worse than those they could have gotten elsewhere, but by that time, they felt trapped by an appraisal that couldn't be transferred and were limited by time.
| Dottie M July 13th, 2024 |
If I get a home equity line of credit from a bank, they accept an ELECTRONIC APPRAISAL and they do not come in the house or on the property whatsoever to appraise it in person. Isn't it okay for HUD to accept an electronic appraisal? Are there any circumstances under which they would indeed accept just an electronic appraisal? I have a chronic illness so the inconvenience of an inside appraisal might even be a deal-breaker for me. Thanks for any insights you can share on this one!
| Michael Branson July 13th, 2024 |
I'm not aware of any plans by HUD to change their appraisal requirements at this time to mimic those of a Home Equity Line of Credit (HELOC). The loans are very different, and therefore the risks associated with each of the two loans are also different.
With a reverse mortgage, after the loan closes, the borrower can remain in the home for life without having to make a payment on the loan (as long as the borrower lives in the home as their primary residence and pays their taxes, insurance, and any other property charges like HOA dues on a timely basis). With a HELOC, banks can freeze the line at their discretion (and they have at times when values are suspect or if they feel the borrower's income may have changed). They may determine that they no longer wish to offer this type of financing, or they can unilaterally determine circumstances have changed and require a recertification of value or qualification of the borrower. The internet is full of articles from Forbes, Bankrate.com, and others that describe the process banks use to freeze HELOC lines of credit when they deem additional risk. If they can freeze the line at any time, the appraisal at inception becomes much less important.
The terms of the reverse mortgage are set when the loan closes and do not vary regardless of whether property values drop later. The overall condition of the home becomes a bigger concern for HUD when they know the borrower can remain in the home for life even though the balance of the loan increases with interest accrual. The borrower has no mortgage payment due with a reverse mortgage as long as they live in the home and pay their taxes and insurance. A HELOC typically has a 10-year draw period with interest due monthly, so there is a monthly payment due that the borrower must pay. Failure to make the payment can result in severe penalties up to and including foreclosure. HELOC lenders receive payments of at least interest only, they can freeze the line at any time they believe values or borrower income has changed, and the longest they go before the payment is increased to a fully amortized payment is 10 years. An electronic appraisal makes sense under those circumstances.
And let's take a look at what happens after the 10-year draw period of the HELOC. The loan goes into a repayment period at which time no more draws are available to the borrowers, and the balance is amortized to be paid in full over the remaining period of the loan, which is typically 20 years. At this time, not only is there no more money available to the borrower, but the payment may go up as much as 200-300% over the interest-only payment. Borrowers can exhaust all the funds available to them with any loan if they use all their proceeds, but with a reverse mortgage, even when you use all your proceeds, you can remain in the home for life with no mortgage payment. With the HELOC loan, whether you use your entire line or not, you still need to make that monthly payment when you have a balance owing on the account.
The bottom line is that the loans are very different. Due to your unique circumstances, you may determine that the reverse mortgage doesn't suit your needs. If you determine that the risks of the lender freezing the line, monthly payments, or future payment increases of the HELOC are of less concern to you than the appraisal requirement of the reverse mortgage, then perhaps the HELOC is a better option in your case. If the terms of the reverse mortgage are more preferable, perhaps you can arrange for help from family or friends to be gone the day of the appraisal and have someone meet with the appraiser in your place? I don't know the nature of your illness or what it would take to assure yourself of protection against compromise, but the visit by the appraiser is typically a short one, as most of their work is completed outside the home. By the time of their inspection, they do not need to spend a lot of time in the home. I believe you could also request the appraiser be masked and wear gloves before entering the home. It doesn't hurt to ask if you think the loan is the one that will best meet your needs and goals.
| James January 5th, 2024 |
Our client had two appraisals on the same property that were approximately $1-million apart! ($3-million vs. $2-million). It turns out that the lower appraiser based his numbers on a 4-bedroom, 2-bath property, as recorded in the tax department. The higher appraiser based his numbers on the fact that the property is actually a 5-bedroom, 3-bath property. The lender accepted the lower of the two appraisals, thereby causing the owner to have to come to the table with $85,000 vs. receiving a $12,000 payout on the reverse mortgage. What's up with this?
| Michael Branson January 5th, 2024 |
While your client cannot suggest a value under Appraisal Independence laws, he does have the right to rebut an appraisal that contains factual errors. The borrower has the right to submit his rebuttal to the lower appraiser requesting a reconsideration of value since the appraiser used invalid sales and supplied different sales information of similar properties that are actually similar to his home that had the appraiser used, which would warrant a different value conclusion.
I'm honestly surprised that the lender didn't suggest this immediately when they saw the sales used by the two appraisers (unless there are other differences that are so egregious that they felt the appeal would not be successful). If all the sales for similar room counts are for homes that are much smaller, much older or the properties are extremely dissimilar in other ways, they may have already spoken to the management company and feel they do not have a good case.
It's the borrower's right to rebut the value if he has the data to support his opinion that the appraiser erred (in this case, he used the wrong room count). The appraiser is not obligated to agree and alter his value. He may correct the appraisal and comment that a change in his opinion of value is not warranted. The borrower does not have to accept the value and close the loan either way, so he should ask the lender to help him rebut the value.
| Janis W. August 20th, 2023 |
What are the HUD requirements for a home that's being appraised to meet the standard of the property being in 'Reasonable Fashion'? What home repairs must be completely met before the home passes the appraisal?
| Michael Branson August 20th, 2023 |
HUD relies on the appraiser to be their eyes and ears in the field. Therefore, lenders typically know what needs to be completed only after receiving the appraisal. It is impossible to list everything required should an appraiser note it upon a home inspection. We do list some of the most common issues that we see for our borrowers on our website, which is posted here https://reverse.mortgage/media/appraisal-checklist.pdf
but it is not all-inclusive.The checklist mentions chipping and peeling paint, exposed electrical wiring, unpainted wood surfaces, water leaks, staircases without handrails, and common roof issues. These items are on the checklist because they are most frequently found and must be corrected before the loan closes. Borrowers still have a choice when some of these items are pointed out in advance to keep from having to fix or repair them later. Painted surfaces can be painted quickly and easily in most cases with a small amount of paint from your local hardware store to avoid the issue of chipped and peeling paint (many paints contain lead, and HUD will not allow the presence of peeling paint). Bare wood allows for termites and other wood-destroying pests, which is another concern of HUD. Suppose these conditions are corrected before the appraiser comes. In that case, it saves you some money on reinspection, so we point them out in advance. Some repairs cannot be done before the appraisal due to the scope of the repair, because of weather, the time it takes to have the repair completed, or possibly the cost of the repair. Luckily, most needed repairs can be made after the loan closes if the borrower needs to do that using a "repair set aside." This is where the borrower gets an estimate from a contractor of their choice for the repair. The funds are left in the loan at an amount of 1.5 times the cost of the repair and then disbursed after the repair is completed. Funds above the repair cost are freed up for availability to the borrower by the loan terms. The only time a repair set aside is not allowed is when the repair is health and safety related. That would include things like no stair railings where someone could fall, unhealthful mold, exposed electrical wiring that could cause shock or fires, etc. There is no "passing appraisal." The appraiser merely reports on the condition and value of the home. It is up to the lender to determine that the home meets HUD's requirements based on that report. Suppose you can do the repairs that would be needed. In that case, you can save a little money by not having to pay for reinspections. Still, I said, you sometimes need to figure out what the appraiser will note in the report. Hence, we let borrowers know the obvious issues that will be reported and allow borrowers to address those issues if they can.
The appraiser will check all the primary functions of your home and will note any plumbing or electrical issues, he/she will do a head and shoulders inspection of the attic (pop their head up and look around with a flashlight, they will not walk around in the attic), and they will walk the property inspecting any additional buildings on the lot. They are not contractors, so they will not try to determine the structural integrity of the home but will note any visible signs of issues such as large cracks, missing roofing materials, exposed wiring, missing cabinets, etc. (as well as consider those things when they determine the final value as compared to the other sales in the area). The lender would determine what would need to be repaired to close as a condition of the loan and if it needed to be done before closing or if HUD program parameters could complete it.
| Paula T. July 12th, 2023 |
I have spoken to 3 reverse mortgage lenders (including Arlo) in the past 1.5 yrs. I have read "many" articles and viewed at least 7 podcasts during this period. Yesterday (7/7/23), to my shock and frustration, the following: The lender I may be using came to my home to do a walk-through on 7/9/23. He cited the following: 1) My front door frame has a 14" long x 1/4" wide area where the paint has worn off, exposing the wood. Further, 2 of my patio wood support beams have a few areas where the paint is worn off. Then he noticed 2 roof corners of the house-to-drain gutters to roof frame corners that show some water staining from rain that spills over during heavy rains. The corners are intact with the house-to-roof to rain gutters, but he said that this might bring up issues and to be prepared to be required to do some painting and possibly to replace any water-damaged areas / other.
I was flabbergasted- and frankly, mad! If FHA appraisals are going to be this critical, requiring such small repairs to be done, why it's their detailed disclosure and discussion right UPFRONT, along with property tax and home insurance maintenance responsibilities? Yes, the literature cites that you need to maintain your home, yet it needs to provide specific information on what this entails. Further, no conversation was provided, nor was a "specific" listing of possible repairs that needed to be done before the appraisal: Not having this "thoroughly" addressed before the appraisal is appalling. Question: What if part of a customer's loan is intended to be used for some maintenance repairs? Then during the appraisal process, you find out that XZY needs to be repaired before you can close the loan; what sense does this make?
Nowhere in any of the literature I have read nor podcasts I have viewed, nor was I informed by 3 RM lenders I spoke to (Who also sent me their package of literature specific to my property, including from Arlo.) explained this: Example, lender saying, such as: Do you have funds for any necessary repairs required by the assessor prior to closing? Hope! Never mentioned. Lastly, neither did my RM counselor discuss this, whom I will reach out to today. Please explain- Thank you, kindly- Paula
| Michael Branson July 12th, 2023 |
I can shed a little light on your issues. Firstly, HUD has a manual for their first trust deed lending program that is over 1100 pages long for loans insured under their FHA insurance (HUD) loan programs, of which the HECM reverse mortgage is one and a separate manual for the appraisal portion dealing with properties and their valuation that is over 900 pages long. DE-designated (Direct Endorsement) underwriters can issue underwriting approvals for FHA loans. They must have sufficient years of experience and have underwritten enough loans that HUD has reviewed that they have been given this designation, but most still need to learn all the rules contained in these manuals that are ever-changing/updating. There is yet another separate manual, the HUD 4235, which contains all the information for the reverse mortgage program. It is virtually impossible to give advance notice to every borrower of every situation about them or their property that could affect their application. I do wish that it would be possible to have everything in one place that would be quick and easy to read and that would allow all borrowers to know if they and their properties qualified or had any issues without waiting for an appraisal, but it just isn't possible. HUD counselors are not lenders or appraisers, and therefore, they are warned NOT to try to tell borrowers about loans or appraisal issues so as not to assure them something is OK or scare them away from a loan for which they would otherwise qualify simply because they don't know the rules and give borrowers bad information.
Here you will find the appraisal checklist we give to all borrowers at the application. It may have covered most of your issues. Still, HUD does not require this disclosure, so not all lenders offer the same help. We have originated and closed only reverse mortgages for 19 years, so we find that this helps as you can see by the checklist, it mentions chipping and peeling paint, exposed electrical wiring, unpainted wood surfaces, water leaks, staircases without handrails, and common roof issues. It also says it is not a complete list; it is just some of the more common issues we run into, but many more things have come up over the years that we could not put into this notice. Borrowers still have a choice when some of these items are pointed out in advance to keep from having to fix or repair them later. Painted surfaces can be painted quickly and easily in most cases with a small amount of paint from your local hardware store to avoid the issue of chipped and peeling paint (many paints contain lead, and HUD will not allow it). Bare wood allows for termites and other wood-destroying pests, so it is another concern by HUD. Suppose these conditions are corrected before the appraiser comes. In that case, it saves you some money on reinspection, so we point them out in advance. Some repairs cannot be done before the appraisal due to the scope of the repair, because of weather, the time it takes to have the repair completed, or possibly the cost of the repair. Luckily, most needed repairs can be made after the loan closes if the borrower needs to do that using a "repair set aside." This is where the borrower gets an estimate from a contractor of their choice for the repair. The funds are left in the loan at an amount of 1.5 times the cost of the repair and then disbursed after the repair is completed. Funds above the repair cost are freed up for availability to the borrower in accordance with the loan terms. Just about the only time a repair set aside is not allowed is when the repair is health and safety related, and that would include such things as no stair railings where someone could fall, mold that is unhealthful, exposed electrical wiring that could cause shock or fires, etc. Most repairs are completed after the loan closes, though, and from what you are telling me, it sounds like all of yours would qualify for a repair set aside as well.
It really isn't feasible to ask all the questions that could come up in an appraisal, which is why HUD considers the appraiser their eyes and ears in the field. Your lender did not give you a checklist like the one we use, but it sounds like your loan officer was pretty good about pointing out items that an appraiser may include in his/her report. The may is an important distinction because appraisal is an art, not a science. There is no way to know if the appraiser will state that the items need repair or just note them or consider them in the condition adjustment when the home's value is tallied and let it go. If you plan to do the repairs anyway, you may want to let the appraisal be completed and let the chips fall where they may, knowing you might need to get those items repaired later or you may want to put a little paint on the areas you know need it. No one can tell you for sure in advance what will be required, and from what you are telling me you can complete the repairs after closing anyway (which I cannot guarantee you because I can't see any of it and I don't see an appraiser's comment).
Oh, and to answer your last comments/concerns, HUD and the lender are not overly concerned with how you maintain your home and will not ever check it in the future for paint, etc., but they do reserve the right to make sure that their security for the loan is adequately protected (just as is the case with any other loan). They can require you to keep your taxes paid, your homeowner's insurance paid, and the home maintained reasonably. I agree that the reasonable manner could be more specific, but they do not want to start checking to see if you are mowing your lawn or pulling the weeds in your flower beds! They do want to be able to intervene, though, if the city were to post notices that you are about to be red-tagged because the weeds and brush are so overgrown and dead that they have become a fire hazard. Or in the case of one home I was involved with many years ago, the people let the pool go for so long that it became a "swamp," the city determined that it was breeding mosquitoes and was a health and safety violation. In those instances, the city or municipality can enter the property, board it up if needed and take further actions so the lender or HUD can enforce provisions in the Deed of Trust or Mortgage to require the borrower to maintain the home in a reasonable manner. This is the only time in 45 years I have ever seen HUD move on a property owner due to them not maintaining the home in a reasonable manner. As the lender, our inspector would not approach the home due to the "stench and insects" coming from the backyard. The neighbors kept calling code enforcement for the city, and HUD became involved after they posted the red tags.
I hope this explains things for you. There is no reason to be angry; the maintenance items are there, and how you deal with them is up to you. If you can do them before the appraiser arrives, it might save you some time and a little cost later (if the appraiser needs to come out and reinspect the home to check for completion, there is a fee for that). If you need to complete them after the closing, it is possible, and a procedure is set up to accommodate your needs. Let me know if you have any questions.
| Davis October 30th, 2022 |
Can I be denied a reverse mortgage, if the estimate that the appraiser used was 6 miles from my mine, because they couldn't find a comparable property in my area?
