Las Vegas Homes, Condos, Land and Commercial Real Estate Blog

Want proof? The reason that I insist on our clients to be pre-approved before looking at a single Las Vegas home or condo for sale listing is that even when success is achieved, and a client finds a perfect home or condo in Las Vegas and we open escrow, anything can go wrong at any time and we have to have time to react.

Below is a real life, real time example and the transaction involves a retired chief master sergeant who I shall call CMS, the loan officer from Bank of America that I shall call LO and an appraiser whom I shall call AP. My client is using a VA loan to finance his Summerlin condo. We found him a great foreclosure condominium that he and his wife love.

Given that foreclosures are sold AS IS, we always have our clients hire a licensed Nevada real estate  inspector to inspect the home or condo as soon as we open escrow, so our clients know exactly what they getting during the due diligence period.

In a Las Vegas REO transaction an unwritten but strictly enforced rule is that the seller (the bank) only pays for repairs that are required for an appraisal and not all of problems that are pointed out in an inspection report. Thus we advise the mortgage officer about the repair demand so they can alert the appraiser about issues that may affect the appraisal so the appraiser can make the repair demands, as required by the selling banks.

VA loans require that a home’s heating and cooling unit has to operate properly and it is a part of the appraiser’s duties to make sure of it. The inspection that we had done pointed out that the heating unit for the condominium did not work.

For some reason I knew that the appraiser was going to miss on the faulty heating unit, don’t ask me how, I just knew. I started calling and e-mailing the loan officer and the buyer to make sure that the appraiser doesn’t miss on the heater. Despite all my efforts, I failed.

The appraiser submitted the appraisal to VA without mentioning the faulty heater and the selling bank is not going to fix it without the demand by the appraiser. My client is extremely angry and so am I.

Below is the e-mail that I sent the loan officer and the appraiser that explains everything with the timeline.

MY correspondence with the loan officer and appraiser for the foreclosure condo transaction.

LO and  AP,

This fax/e-mail is regarding the appraisal that you have done for the Bank of America which involved my clients Mr. and Mrs. MSC The address is XXXXX.

The inspection resulted in the following repair demand that I forwarded to the buyer and advised him to talk to LO about too, so we can make sure that repair orders for the heater and other issues come from the appraiser so the selling bank would do the repairs. The following e-mail was dated 12/26/08

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“Hello,

CMS, The buyers of X condo demand that the following be repaired before due diligence period expires. Please be advised that heating and air conditioning is an appraisal contingency for a VA loan. The second part of inspection report is attached.

LO, please make sure that appraiser is aware of the heating unit problem.

1. The heating unit did not produce any Hot Air, Air temp out of the registers at 65 to 67 degrees, (Recommend a service from a licensed HVAC tech).

2. Exterior stucco on the balcony roof has numerous cracks, all small.

3. 1 plug cover plate is broken in the living room

4. The washing machine is not in a drain pan.

5. The kitchen sink faucet has a low water volume.

6. The dishwasher Air Gap Device leaks.

7. The stairs middle landing has a floor squeak in it.

8. A small hole in the upper part of the window sill in the hall bath by the glass block. ( caulk )

9. The switch for the living room ceiling fan did not operate the fan.

10. The switch in the rear bedroom for the 1/2 hot plug did not operate the plug.

11. 1 kitchen cabinet under the sink is slightly warped.

12. The attic access cover was sealed shut and could not enter.

13. The kitchen sink has a chip in it.

14. The master toilet flapper needs to be changed.

————————————-

When we contacted the listing agent with the repair demand their answer was on 1/5/09

————————————–

“HI KAREN

I WILL NEED A SPECIFIC LIST FROM THE LENDER OR APPRAISOR SHOWING WHAT NEEDS TO BE REPAIRED BEFORE WE CAN DO ANYTHING.  I WILL HAVE TO FORWARD THAT TO THE BANK TO BE APPROVED.  PLEASE FORWARD LIST AT YOUR EARLIEST CONVENIENCE.

THANK YOU, ASST EB”

—————————

And we advised LO on 1/5/09

————————-

“Hi LO,

Below is the response to the e-mail I sent about the repairs on CMS’S condo. They need a specific list from you or the appraiser as to what must be repaired. Call if you have any questions.”

————————-

“LO e-mailed us the following on 1/6/09

Attached is a copy of the appraisal.  There are no repairs listed on
this report.    It is being reviewed by underwriting in the next 48
hours.  If something is needed I will be notified and I will let you
know ASAP”

——————————

To which we answered on 1/6/09

—————————————–

Hello,

“Attached is a copy of the appraisal.  There are no repairs listed on
this report.    It is being reviewed by underwriting in the next 48
hours.  If something is needed I will be notified and I will let you
know ASAP.”

What does this mean?

I have already e-mailed you the inspection report and the heating unit does not work. The bank will only do repairs that are needed for appraisal. I don’t know what else I have to do to get this point across.

IF THE APPRAISAL IS NOT CONTINGENT ON HAVING THE REPAIR DONE, THE SELLING BANK WILL NOT DO IT.

I am starting to lose patience as you don’t seem to get this. I need you to answer me ASAP.”

——————————-

LO answered on 1/9/09

——————————————–

“Hello;

We are in contact with the appraiser.  We have not heard back from them yet.  The appraisal did not list the heating as a repair that is needed.  They are going to check it again.  We should have the report on Monday.”

———————————————–

Today LO advised us that the appraisal has been submitted to VA without the needed repairs and that the VA will not consider a second appraisal or an amendment. I want to know how Bank of America and VA can fund a loan without a functional heater?

Although it is not my job to make sure that loan officers and appraisers do their job, I saw this problem coming from the GET GO and have done all I could through numerous phone calls and e-mails to head it off, I couldn’t do it because of you.

You messed up. You have until tomorrow at 4 pm to answer this in writing and take care of this problem to Mr. CMS satisfaction.

————————————————————————–

As you can see I didn’t use the real names of the loan officer and the appraiser, it is due to the fact that if I did it will hunt them for a long time because if anyone Googled their name, this article will be at the top of the search page and hurt them. But I mentioned Bank of America by name, stupid bankers deserve it.

Do you believe Masoud’s Law now? Aren’t banks, especially Bank of America stupid?

Related web-site links: Las Vegas houses, condominiums and commercial real estate for sale, Las Vegas, Nevada Homes for Sale, Short Sales, Foreclosures, HUD Homes and Fixer Uppers , buying Las Vegas condos for sale, Buying Las Vegas new homes for sale