Thursday, June 14, 2012

Prime Lending Update - Invoices on the HUD

Hey All,

We have been seeing some things happening when there are invoices being added to the HUD. Here are some examples:

1.   Conventional Loan – Termite inspection for $75 (amount doesn’t matter). Normally that has no effect on anything as a termite inspection is not required on a conventional loan.

NEW:  If there is an invoice on the HUD regardless of loan type, the report will be required. IF there are termites, or anything in that report that would be concerning/needing attention, you must also obtain the termite treatment, engineer’s report, etc.

Ask that your borrower’s pay for this outside of closing to avoid problems!

2.  Home Inspection – Almost all borrowers get a home inspection. Most are paid for outside of closing and do not appear on the HUD, but if you put one on the HUD, you will likely be asked to supply the home inspection report (and these things tell every little detail of the home, which may be problematic for us!) 

Even if a borrower has paid for the invoice, and it's added to the HUD so the seller can reimburse the buyer, this could open your buyer up to risk.