Selective Health/Safety Defect Disclosure Repair Sent to Lender's Underwriter in CA

**sfcruiser** · 01-10-2012, 11:44 PM

In the final stages of purchase of foreclosure in California.
Asset manager wanted itemized list of defects to negotiate/substantiate price reduction after inspections and obtaining bids from local contractors to correct defects.
Those same items were listed in an addendum which the asset manager edited to send to the mortgage underwriters. The purpose of the "edited" list was to prevent failure of the loan contigency and repair requirement of "known" health and safety issues that were raised by the home inspection, and to prevent the deal from becoming a cash deal.
In the state of CA is this type of manipulated documentation for that sole purpose legal? If not what type of repercussions can arise if audits from the mortgage company find these irregularities in the documentation?

**Greg** · 01-11-2012, 04:57 AM

Lying to a lender in order to get a loan is illegal in all of the states. While you may not have been the one who made the changes you will be the one held responsible. Speak up and make the bank do the repairs before the purchase.

From where I sit it sounds like this is not the house for you.

**sfcruiser** · 01-11-2012, 09:20 AM

If the information is already in the inspection report but underwriting is just not focused on it, isn't it just an oversight by the lender at this point.
The itemized bids to correct the defects are not included.
If underwriting was that concerned they wouldn't they call they own inspectors to audit the costs?
The window is not transparent.

**Greg** · 01-12-2012, 04:19 AM

Originally Posted by sfcruiser

. The purpose of the "edited" list was to prevent failure of the loan contigency and repair requirement of "known" health and safety issues that were raised by the home inspection, and to prevent the deal from becoming a cash deal.

Would a judge consider an 'edited' document to be an underwriter over site? Or would a judge consider and edited document to be fraud?

**sfcruiser** · 01-13-2012, 09:18 AM

From the appraisal knowingly matching the offer price, due to a biased report by almost all appraisers receiving the purchase contract prior to them writing up the appraisal, to improper foreclosure procedures leading to buyers receiving a special warranty deed to indemnify the banks, to realtors always reporting that they have 5-8 phone calls a week and several backup offers that don't materialize after I drop out of a deal, only to resubmit my offer.

How many of these issues would judges deem as illegal business practices or unprofessional?

The abridged list of repairs to justify the price reduction after the accepted offer, the home inspection, and contractor bids, though edited is still complete in the inspection report. If the underwriter sees the list and deems the documentation is a satisfactory report, a judge would put the majority of the responsibility on the underwriting dept, since all the information is present and in the hands of everyone involved.

**curtismay** · 03-03-2012, 09:03 AM

We're in the process of trying to secure a loan for a home in Long Beach, CA. There was some major flood damage done to the home, and we're expecting a large repair bill. How can we go about fixing the problem when the home loan was approved, but more damage was realized? There is some pretty dangerous mold that we discovered in the basement. Can we try and get an addition to the loan?