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Buying Home - FHA Appraisals

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M

mla_diva

Guest
What is the name of your state? What is the name of your state? NJ

During inspection of a home we plan to buy, it was noted that there were some cracks in the foundation masonry that need to be patched, and that although the furnace was operational and blew hot air, but should probably be replaced since it didn't have many years of life left in it. We arranged for a credit at closing with the seller which split the costs 50/50.

During the FHA appraisal, the appraiser noted the furnace as operational and did not note that the furnace needed to be replaced, but did note that a broken window, and a missing handrail had to be replaced prior to closing. Somehow the credit at closing we arranged for the furnace was sent to our mortgage lender, and the mortgage lender had the appraiser change our appraisal to say that "warm air is not emitted," then wrote it into our mortgage commitment that is had to be replaced prior to closing. The mortgage commitment now reads that it is contingent upon these repairs (furnace, railing, window) being made. Question 1: Is it legal for them to change the appraisal, especially since what they changed it to is untrue?

Our contract states "If a written mortgage commitment is not obtained by XYZ date, this Contract shall be null and void unless the Buyer waives the benefit of the mortgage contingency clause by 7 days. At the Buyer's request, the Seller may also extend the mortgage contingency date in writing prior to the above commitment date. If there is no such subject waiver or extension, this Contract will have been canceled and the deposit will be returned to the Buyer upon receipt of written authorization to the Real Estate Broker from the parties." Other Mortgage Conditions listed reads "Subject to Appraisal." We did not have the mortgage commitment as of XYZ date, and did file for the 7 day extension. We did not actually receive the mortgage commitment paperwork until 25 days after the 7 day extension period had expired, and we have not signed and returned the mortgage commitment yet, and it is due in 3 days.

We want to remove the credit at closing and have the seller make the necessary repairs prior to closing, as we are unwilling to fix a furnace, railing and window in a house we do not yet own, especially since we would lose that money if the deal fell through prior to closing and may have a tough time trying to get it back. The sellers are unwilling to fix the furnace, railing and window prior to closing. We are at an impasse as far as these repairs are concerned, therefore, we can't satisfy the mortgage commitment contingencies. Question 2: Is there any way we can back out of the contract without losing our deposit?
 


HomeGuru

Senior Member
The mortgage lender can put any condition in the committment as long as it is legal.
Review your contract because there should be a financing contingency that allows you to terminate and get your deposit back. Hire the attorney that you should have hired before signing the contract, to advise you further.
 
M

mla_diva

Guest
Thanks guru

Actually, we did hire a lawyer that was recommended by the mortgage lender, but it turns out that they are not very good. Thanks for the info.
 

HomeGuru

Senior Member
Good luck to you. As a side note, whomever wrote some of those contingencies in your contract should be shot.
 

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