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My husband & I accepted this loan with poor guidance from New Penn Financial, BOA and our loan consultant. Our 203K consultant recommended the contractor. Now we are be evicted from our home because the contract and consultant never pulled the permits. County inspectors found live uncapped wires through out the home. The home required mold remediation, but the contractor's chect was return so the remediation company stopped work, so the contractor falsified a document stating the mold remediation was complete. We have hot water running to the toilet, air ducts not connected, insulation not installed and the list goes on. My contractor Hobby Building & Design was paid over $90,000 to rehabilitate the house and now we are looking at $72,000 to correct is poor workmanship. This loan has been a horry story. New Penn Financial lied about deferring the payments until the rehab was complete, the 203K consultant released money to the contractor without the work being complete and without permits being pulled and Bank of America is holding the last $23,000 of our funds because our 203K consultant has been caught in too many lies. The program does not have enough failsafes in place to protect the buyer.
So you made poor choices, didn't pay attention to contractor, consultant or lender selection and things went wrong?
On a Consultant 203K draws are not released without your signature on the draw request. It's a HUD form, it's standard and it requires your signature every time. Why did you sign the draw request if you were not happy with the work?
What I see is a lot of people who didn't do any research, didn't put any time or effort in selecting a contractor, didn't do due diligence on the house, the contractor or the lender and they ended up with a bad experience. Shocker.
You are buying a house. You are about to sink a fair amount of money and time into your single biggest asset / liability via a mortgage product that many of you clearly didn't understand. Why?
The 203k loan works, it works well. It is a huge part of restoring our housing market. It allows home buyers to purchase foreclosures at huge discounts. Before you enter the largest transaction of your life, do a little research, find an expert.
2 minutes of research could have told you that BofA sucks, a simple google search. One question to your lender, who disburses the draws? One BBB search on your contractor. One question to your lender, how many 203k loans have you closed?
Most of the perceived issues with the 203K program are because lazy home-buyers don't do the proper due diligence on the lender, the contractor and the consultant. If you put a little effort into it then you'll end up with the best deal on the market, if not then you'll end up whining on this forum.
So sorry to hear about your experience with the 203k loan. BofA is on the hook here and they need to help you fix this. They could and should have researched the HUD Consultant and contractor as well. There is a due diligence process on their end too to check out these people. My recommendation is to get an attorney quickly. BofA has deep pockets. The 203k loan isn't for the feint of heart, and it generally is a great problem solver. Again sorry to hear about your problem. 203k loan
It's not always that black and white. There are plenty of times when homeowners do the due diligence, are able minded and quite hard working. However, sometimes things change mid-process. If you've been part of the 203k process before - you know how small things / changes can throw a big wrench in the entire process - even jeapordizing the entire loan. Please re-read the thread and notice how a contractor was willing to file leins against the homeowner because the bank wasn't "fast enough".
Just my 2cents. Thanks
Quote:
Originally Posted by JonathanBlackwell
I just read the rest of this thread, wow.
What I see is a lot of people who didn't do any research, didn't put any time or effort in selecting a contractor, didn't do due diligence on the house, the contractor or the lender and they ended up with a bad experience. Shocker.
You are buying a house. You are about to sink a fair amount of money and time into your single biggest asset / liability via a mortgage product that many of you clearly didn't understand. Why?
The 203k loan works, it works well. It is a huge part of restoring our housing market. It allows home buyers to purchase foreclosures at huge discounts. Before you enter the largest transaction of your life, do a little research, find an expert.
2 minutes of research could have told you that BofA sucks, a simple google search. One question to your lender, who disburses the draws? One BBB search on your contractor. One question to your lender, how many 203k loans have you closed?
Most of the perceived issues with the 203K program are because lazy home-buyers don't do the proper due diligence on the lender, the contractor and the consultant. If you put a little effort into it then you'll end up with the best deal on the market, if not then you'll end up whining on this forum.
I am a 203K Consultant and the amount of misinformation here (original poster) is off the charts. Firstly, I work for the borrower and protect their interest. When I do an inspection, often the borrower has a contractor on board and a price in hand. I do a reality check for them: Has the contractor included everything? If not, then I insist they add it BEFORE the closing so we avoid costly change orders. I recently looked at a house in Dorchester, MA that was bid on without ANY electrical costs included in the price - unacceptable. These 1st time buyers went back to their GC and asked him to add the needed costs for re-wiring the new bath and kitchen which - HELLO - triggered an upgrade for all the fire protection systems and the main electrical panel. So an ignorant person may say "Well the 203K consultant came out and now my project is costing more" you should realize you actually got something for your fee: good advice and a better project with cost controls UP FRONT.
I am a construction PROFESSIONAL. I do not negotiate my fees either. I have rehabbed over 10,000 housing units in the MA housing market and I help people all the time who need to make good decisions about borrowing money under the 203K program.
CWaggy—We are considering a mixed-use property in MA (urban Boston area), which we are told would require a 203k loan. If you have local leads/info, please message me privately.
Can a few of the educated assist us, the consumer, by providing the specific links to understanding these bylaws?
Does FHA have a PDF with 500 pages of red-tape guidelines that can be helpful if read?
Are there any suggestions for finding a contractor that does these kinds of repairs?
If we send the inspector into a place is it better to not go the route of the 203k with that repair for a shower and $5000 for a shower can be very costly and can you reverse course to a traditional loan?
I'm ignorant and this is my first home buying experience so the other question that I have is do they get you at hello with the fees from an unethical standpoint? Is there a mortgage thread from this group that has a buyer beware of lenders set of guidelines.
To me an easy solution is don't do a 203k!. Mixing a construction loan/line of credit (which is complicated enough on it's own) with a government loan (which is complicated enough on it's own) is a recipe for problems. Most lenders don't do them for a reason.
Let's say we find a fixer-upper that is for sale. What is the best possible way to negotiate with a seller to get the bathroom shower leaks fixed before purchase or something major like a roof.
Let's say we find a fixer-upper that is for sale. What is the best possible way to negotiate with a seller to get the bathroom shower leaks fixed before purchase or something major like a roof.
The alternative is to find a home that doesn't need major repairs.
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