Tuesday, August 25, 2009

Legislation and Home Inspection

(Washington, D.C.) May, 25th, 2009 — The U.S. House of Representatives committee charged with solving the home mortgage/foreclosure/credit crunch crises has added key home inspection counseling provisions to the Predatory Lending Bill, HR1728.

The Financial Services Committee, chaired by Rep. Barney Frank (D-MA) adopted the concept that was also championed on Capitol Hill by Rep. Nydia Velazquez (D-NY).The legislation is designed to use the vast resources of the federal government to awaken harried homebuyers to the benefits of home inspections at a critical time in the home buying process.

The General Accounting Office (GAO) conducted a study of homebuyer confusion and its impacts on home inspection. GAO found that, even among people who had just bought a home, most did not know that home inspections are not conducted automatically, or that appraisals are not home inspections, or that HUD recommends that buyers obtain a voluntary home inspection. Many thought that FHA performed inspections automatically or did not realize that they would need an inspection.The bottom line is that many potential home buyers do not order a home inspection due to confusion , poor understanding and ineffective, untimely communication.

The suspicion of the existence of massive homebuyer confusion has been vindicated by revelations that homeowners now drowning in mortgage debt were utterly confused about many aspects of their purchases. This has put the entire home sales industry at great risk.

In response, the Financial Services Committee added a major chapter on housing counseling in the Predatory Lending Bill. The Velazquez Amendment adds to that the counseling chapter. The provisions added to the Predatory Lending Bill require the U.S. Department of Housing and Urban Development to take such actions as are necessary to inform potential homebuyers of the availability and important of obtaining an independent home inspection.

At a minimum, the new legislation requires HUD to:

Publish HUD’s advisory “For Your Protection: Get A Home Inspection”
Create a new booklet for homebuyers advising them to obtain a voluntary home inspection
Publish HUD’s advisory “Ten Important Questions To Ask Your Home Inspector."
Ensure the new booklet will address FHA and non-FHA home sales.
All publications shall be published in both English and Spanish to reach the growing market of Hispanic homebuyers.

HUD is charged to make the widest possible distribution of the materials, including electronic distribution on the Internet, and, where appropriate, public service announcements and toll-free hotlines operated by HUD.

The agency is charged to give special emphasis to reaching first-time and low-income homebuyers. One of the greatest challenges is making sure that prospective homebuyers get the message on home inspection with certainty, and early enough to influence the process, and that the message on home inspection reaches the entire market.

Under the new provision:
All FHA-approved lenders will be required to provide prospective mortgage applicants these materials at first contact, whether for pre-qualification, pre-approval, or initial application, to ensure that prospective homebuyers consider home inspection as early as possible in any transaction.
The housing counselors for each counseling agency certified by HUD to provide housing counseling shall be required to provide these home inspection materials to prospective homebuyers as part of the counseling process.
All HUD-approved housing counselors will be trained to counsel homebuyers on home inspection, including the importance and availability of home inspection, and information on how to locate and select a qualified home inspector.

Tuesday, August 11, 2009

Tampa Home Inspection Results

Several of our clients have asked us to post a pic of Chinese Dry Wall. The pic on the left clearly has the word, "CHINA" printed on the back of the drywall face. The second (on the right) has the word, "KNAUF" which is the licensee (in Germany).
We have some pics on the main site,