Listing all posts with label 203k software. Show all posts.
  1. The HUD guideline allows a consultant to charge what is common and typical for that service area.
     
    There seems to be some confusion on this issue as when the so called "new guideline" and that is all it is, a guideline, when it came out it hadn't fully addressed our draw inspection fees. There are several other issues that we'll talk about in the next couple of weeks to help you see some other major flaws in the "new guideline" that just came out too soon, they hadn't taken the time, though they had plenty of time, to complete their work.
     
    The guideline actually states that on going draw inspections can be financed and can be whatever the typical and normal fee is for the area.


    Specifically from the guideline as follows: Page 355 if you want to look it up.
     

    D) Standard 203(k) Financeable Repair and Improvement Costs and Fees


    The following repair and improvement costs and fees may be financed:
    · costs of construction, repairs and rehabilitation;
    · architectural/engineering professional fees;
    · the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee
    Schedule section;
    · inspection fees performed during the construction period, provided the fees are reasonable and customary for the area;
    · title update fees;
    · permits; and
    · a Feasibility Study, when necessary to determine if the rehabilitation is feasible.

    >END<

    All of our fees are published and have been for years. These are our typical and normal fees for all areas throughout the USA where we deliver these services. In an effort to be consistent.  Our published fee - click here
  2. This has been misread for long enough - we are not held to only 5 draws

    4240.4 REV-2 (5-2.C.) 2) Intermediate draws (four maximum) are inspected by the HUD assigned fee (or DE staff, where applicable) inspector (see paragraph 4-9).

    If the cost of rehabilitation exceeds $10,000, then additional draw inspections are authorized provided the lender and borrower agree in writing, and the number of draw inspections are shown on Form HUD 92700, 203(k) Maximum Mortgage Worksheet.

    Even HUD is guilty of misinterpretation of this. Now we have lenders who think on large projects there are only 5 draws allowed, 

    I just received an accounting from a lender who charged $250 x 5 title update fees... they missed this in the guideliine

    4240.4 REV-2
    (1-13.)
    E. Title Update Fee. To protect the validity of the mortgage position from mechanics liens on the property, reasonable fees charged by a title company may be included as an allowable cost of rehabilitation. Where the mortgage position is protected and is not in jeopardy, this fee may not apply. Borrowers may wish to obtain lien protection, but the fees must be paid by the borrower where such lien protection is not required to ensure the validity of the security instrument (see paragraph 1-20). The allowable fee should not exceed $50.00 per draw release. If all draw inspections are not made, monies left in escrow must be applied to reduce the mortgage balance.

    Supplimental origination fee - The lenders get this fee and it is a minimum of $350 or 1.5% of the construction cost.  They think this fee is for writing 5 checks, and they are willing to take $70 per check, that seems reasonable to me... how about you?  But, watch what happens when the project is $500,000 in construction... they get 1.5% and they seem to think it is for writing those same five checks. They don't seem to understand this is to manage the additional draw inspections. Why would it make sense to pay them $1500 each to write five checks.  Of course it doesn't make any sense at all.

  3. What is the draw inspector's roll on an FHA 203k project?

    The consultant has a couple different rolls during the process and it is easy to get them confused and they do get confused all the time.  We have to be chosen or at least approved by the lender. 

    1) As a consultant, we help the client create a scope of work so all of the contractors can bid the same list. It creates less confusion and if the specification is written well enough no one will have any questions. 

    The more detail, model numbers, etc that the borrower can supply up front the better the project will flow through the completion.

    2) Here comes the confusion. Once the project funds and the works begins the consulting is over and complete. Now the roll is as a draw inspector.  We are no longer the consultant though we are happy to provide answers through the process, we no longer work for the client, we work for the lender to insure the work is completed in a professional and workmanlike manner.

    Many clients believe that the consultant is still the "consultant" and that just isn't so, It doesn't mean we can't answer questions as a consultant and help the client through some of their issues that may crop up from time to time but our roll is to inspect the work that the contractor has requested on each draw inspection. We won't, however call the contractor and criticize them for not doing their job. 

    What a consultant is NOT - 

    Clients constantly call us telling us the contractor isn't doing their job. They didn't show up today for work. They haven't had anyone on the job this week. The contractor showed up for an hour today and left and hasn't been back. 

    All those are valid issues but YOU, the client are the contractor's boss and it is YOU that must call the contractor and let them know what YOU expect. 

    The guideline indicates the contractor, once started, should have someone present each day working on the project till it is completed. That person may be picking up parts to be used on the project so use some discretion.

    When the draw inspection happens it is wise for the borrower and contractor to both be present so everyone can see what the results are and how they were derived. If you have a representative there that representative should NOT be asking questions about items NOT on the draw request. We are there to look at the items requested and nothing more. 

    We are not there as a quiz, to be be questioned on issues that are between you and your contractor. If that needs to be done then send and email with the issues clearly spelled out and the desired result you are looking to achieve. Then we will see if we can ease the situation for you. Don't surprise us when we think we are doing a draw inspection and arrive to find you and the contractor ready to exhange blows. It just isn't appropriate. Lets get the a resolution long before that.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..


    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  4. The new HUD Guideline

    I'm getting lots of calls about how HUD can shove it and it has lots of consultants in a tizzy. STOP, please stop, let the dust settle a little bit. I was talking to a HUD official in DC the other day and was assured that thing are on the commissioners desk for signatures that changes all that we are reading with regards to our future fees. 

    In any case our fees are not determined by HUD, they are determined by each and every one of us as individuals. If you want to charge off the guideline and get 1994 pricing go for it. It isn't any more than an amount that HUD has determined is the maximum that they are willing to include in the loan amount. Yes it is grossly out dated and no, it doesn't come close to reality. 

    If these prices go into effect there will be so many areas where the public can no longer be served by this progam and that isn't typically HUD's idea of public service on their programs. Just "chill" for a bit and lets give my DC contacts some consideration and then, if it was a lie, the court system will be the next likely step. 

    Any lender that tells you what to charge is setting themselves up for a rude awakening. They have been trying to control our fees for at least twenty years that I know of and this rude awakening is likely the next step. If you want to be part of the cure, then get out your check book and be ready to spend a hundred bucks when that time comes. If we all do that, we will not only show unity but we will also so them we can no longer be pushed around.

    This is only HUD and not Fannie Mae so all isn't lost. If you want to be part of an even larger loan program that works like the 203k with limits up to $3 Million let me know and join the Mike Young Team of consultants nationally.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  5. The new HUD Guideline comes out shortly. On 9-14-2015 the new Guideline comes out. This is NOT a reflection on the prices a consultant can charge for their services. HUD doesn't restrict what we can charge, only an amount they are willing to take on as a risk to the loan at this juncture.  Whatever they come out with on the 14th of September doesn't reflect a mandatory fee, only an amount that can be underwritten into their loan.

    If the loan is for a total amount of $350,000 they can only stand to add $XXX to that and make sense in their model for insuring that loan. That merely means we have to pick all of our fee up front at the time of the inspection and only $XXX will be included in the loan amount. This is actually reasonable for them to do. We need to select a representative down the road to represent us. A level headed person who has "negotiating" ability. NOT someone who merely whines about our fees being too low. That isn't and hasn't been the right arguement ever. We can't win that arguement once you realize there is more to them increasing our fees than just pleasing us. 

    Each of us has to determine what a "resonable fee" is for our work and realize that HUD is only telling us the part or portion of our fee that they are willing to underwrite and add to the loan for a 203k. I hope that is understandable as it actually does make some sense. Don't let any lender tell us what to charge that would open them up to a class action suit from us IF WE GET AND STAY ORGANIZED.

    There may be some lenders or home owners that look at the guideline and think this is all we can charge, that is false. It is all that can be underwritten into the loan. 

  6. I hear allot about the "limited 203k" loans falling appart as they require more money than the $35,000 cap. There are other potential solutions for the home owner. 

    I was reading a blog post on another site where  a young man was discussing purchasing a triplex that he planned to live in and another purchasing a four-plex to live in one of the units. This is all good but then they talked about the "limited 203k" loan as being their best shot. 

    Look at this scenario - purchase with the Limited 203k and go for the $35,000 (acutally $34,200) including contingency if your lender requires a contingency and many do. Now you only fix the minimum repairs that get you in control of the property. Once you are in control of the property get a Title I loan. Title I loans are also fixer loans. You get all the money up front and have six months to complete the work.  How much can you get under this program? $12,000 per unit or another $36,000 less costs and fees for the triplex or $48,000 for the four unit property. For a single family home you can get up to $25,000, but two units would only get up to $24,000.

    Remember that you already did some of the work so this new work MUST be disctictly different work and this loan is typically a shorter term of 20 years but in all cases it must be shorter than the remaining mortgage on the first loan. Yes, this is a second loan.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  7. Draw requests - Seems simple enough on the surface

    There are four columns to a draw request. Column 1 is what each category or section has alloted to the completion of those items. Column 2 is everything that has already been paid out in the previous draw inspections. Column 3 is the current request, and column 4 is for the consultant to adjust the draw amounts if he or she doesn't agree with those items in column 3. Typically this would be a downward adjustment.

    Contractor creates or fills in a request form, column 3. Then we are called out to do an inspection to see those items were completed in a professional workmanlike manner. 

    Today was an interesting draw experience. The contractor failed to sign the draw request. I would normally ask them to sign prior to inspecting but this was the forth draw and we just started inspection. We went through all the items and when it came time to sign the contractor refused. I reminded him that this is to get him some cash flow, but he felt it more important to use this as a negotiating tool against the home owner some how. I told them to work it out and let me know when he wants to proceed. 

    He called me about a half hour later asking me to return to the site for hsi signature or he could meet me. I scanned and emailed the paperwork to him for his signature. Not all turkey's are running loose on the plans.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  8. I need my 203k report in a RUSH!

    I bet you never heard that before, right? NOT

    There isn't a day that goes by that we dont' hear that "comical statement" why is it comical? Because most of the time it wasn't necessary. I just got one a couple days ago where they called me for a RUSH project on Saturday, asked that I rearrange my schedule for Monday but couldn't actually give me the order at that time. Just "could you do it Monday?" Trying to be accomodating I said "sure, we'll figure it out, but you need to place the order". They didn't, of course, but low and behold, I get a call Monday afternoon while having lunch in a nice restaurant asking me to be there in a couple hours. I can't believe the number of people that trivialize what we do and yet it is so important in the process.

    No paperwork prepared yet and no way to prepare it before the inspection. Then they failed to bring my check to the inspection. Funny how that works. 

    What do we do for our money? Create a scope of work, bid the job, and send it out to contractors to bid the project. This rush project was because they waited too long to order the report thinking it was a streamlined k (now called a Limited 203k). People in the business know that 98% of all problem 203k loans is due to the "Limited 203k" program where there is no-one to oversee the project. Had a consultant been brought in early in the process even as a home inspector then there would have been no need to "RUSH" anything. 

    FHA designed the consulting portion of our job to take two weeks, we have spoiled our customers and get them done in about 4-5 days typically and then they want a RUSH... too funny for words. The contractor will take 3-4 weeks many times to do what we do in 4-5 days. Your consultant needs time to do their due dilligence just as you do. When someone asks for a RUSH it is typically because they are poor planners and their lack of planning becomes someone elses RUSH. 

    Once you have a problem call our 203k911.com hotline and we'll help you through it or better yet, call us in the first place once you have an accepted offer and you won't experience the need for a RUSH order. 

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both states of CA, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. 

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  9. Award winning 203k Software for consultants and lenders

    We received an interesting call the other day from a competitor who was trying to sell their software to one of my staff consultants. We learned all kinds of stuff about our software and what it couldn't do. We had to laugh because in every instance we could do what they said we couldn't do and what makes it more interesting is that we have been doing all of those things for 8-10 years in all cases. 

    I can't tell you what our competitor's software may or may not do, I would be folling myself to be so presumptuous. What I can tell you  that our software was voted the easiest to underwrite for it's output by a national association of mortgage lenders. 98% of the 400 attendies told the story for us.  I can also tell you from actual experience that I took over two projects recently from two different "consultants" both using our competitors report software and it showed me just how far superior our software is to the competition. 

    The reports were confusing and poorly put together. They required too much reading just to see there is nothing there to read. If you are using this other software  I can now tell you without a doubt that you are using a toy when comparied to our product. You will save about an hour writing each report and about a half hour to an hour in performing each draw inspection. Every consultant I have talked to that admits to using this other software isn't happy with it but they are used to it. So we have offered a solution. A FREE 3-month trial of our product to any existing consultant so you can actually test the product and our claims. All I ask is that you read the user's manual we provide. If you feel you would like to actually watch a project being written we can set that up for you as well. 

    Why do I say for "Lenders" too? There are allot of streamlined k loans out there, soon to be called the Limited 203k btw. Lenders use our software because it is so very simple to learn and navigate. It also allows you to input up to five trade contractors and then kick out separate HomeOwner/Contractor Agreements and separate "Scopes of Work" for each contractor in addition to all the other paperwork you may need to complete a project. There are a number of lenders who "require" the use of our software to speed their underwriting process. We do offer our lenders who agree to use our software output exclusively a special discount to their consultants. This helps the lenders close loans faster by being able to have that consistency and brevity.
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.
    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
    Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug

  10. This one gets me all the time. You forgot the case number, here it is please insert it on each page of the report. I'm surprised you forgot it with as many of these as you have done.

    LMAO, the case number is ordered after our report is completed and turned in. It is ordered when the order the appraisal, they can't order the appraisal till they know the cost of the repairs. It is a "catch 22" for sure. There isn't a week that goes by that we don't get asked to provide the case number on all the forms. It is actually a pretty simple thing to do with our proprietary software. We merely add the case number and reprint the report with a push of a button then send that pdf to the client and their lender. 

    If you are a 203k or a HomeStyle® Renovation Mortgage lender and would like to try our software for FREE to kick the tires please request it and we are happy to provide it to you. It is actually an asset to many who only do the streamlined k, soon to be renamed "Limited 203k". Our software output was voted "easiest to underwrite" by a 98% margin over our competition. If you haven't tried it ask for a free trial. If your consultants reports are adding correctly or are just leaving too much work for you.. give ours a try. 
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug

  11. I'm the last one to talk about the competition's product typically because I don't know what their product does or looks like... I say typically since I just had the opportunity to take over a couple of projects where my competition's sofware was used... what a nightmare. It took 45 minutes to do a draw inspection versus about 10-15 minutes using our software. 

    I learned first hand just how mure more powerful our product was. Now, I can actually state that if you are using any other product we can save you lots of time on your draws. Underwriters have voted us #1 for underwriting the loans. That means our product helps get the loan closed faster. Our competition takes 12 pages to say what we say in 6. Why would you want to look through 12 pages to find the answers you need versus doing it in 6 pages? 

    This is like playing the game with as a toy versus a tool. I challenge anyone who is currently a consultant to use our software for 3 months and tell me different. I think once you try it you will fall in love with our product. I'll give you a free 3 month trial with proof that you are using our competitor's software. You will be the big winner. 
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.
    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
    Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug


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