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There is this Zen saying that if your house burns down, you have a better view of the moon. Peg Lorenz tried to be Zen about what happened to her new house, but she couldn’t sleep at night for the first time in her life.
"You know one thing I notice is that at two o’clock in the morning, I have owls that talk to each other in my woods," Lorenz said, laughing. "You hear this beautiful little 'do do do do, do do do do!' "
Lorenz was up at night because she couldn’t move into the house she is buying. Her closing date — when she’d sign and get the keys — was supposed to be March 31. But two days prior, President Obama signed something else: a major disaster area declaration for seven Massachusetts counties, including Middlesex, where the house Lorenz is buying is located. That raised a red flag with her mortgage lender that her new home could have water damage.
All of a sudden, Lorenz and the moving truck she reserved were in limbo. Her old house had already closed. The people she sold it to let her stay — for a price. And day after day no one could tell her when her home loan would go through, even though she knew her new house stood on a hill and had no flood damage at all.
"My first question to my lawyer after (was), 'Who can I sue?' " she said. "I mean, it was kind of tongue-in-cheek. But that’s how frustrated I felt."
"Frustrated" is how thousands of home buyers and sellers in disaster counties may now feel because they have to wait for certified appraisers like John Corsetti.
Now banks are asking appraisers to go back to the same places they already appraised to make sure there’s no water damage.Corsetti had been busy enough lately. But now banks are asking him to go back to the same places he already appraised to make sure there’s no water damage. These do-overs have doubled his workload.
But he can tell a house is fine. He clicks a few photographs and gets back in his car. It doesn’t seem like a lot of work, but there is a lot of driving around. Corsetti says that makes it hard to accommodate people who have a closing deadline.
The rush in business is not just coming from homes about to close. It’s also coming from homes that recently closed, or are being refinanced.
John Hanifin can explain. He’s with Mortgage Master, a Walpole company that is the second largest provider of home loans in the state. Like many lenders, Hanifin’s company turns around and sells its loans to financial institutions.
"The collateral for a mortgage is the house," Hanifin said. "And you don’t want to own a mortgage on a house that can’t be lived in and needs to be torn down."
So before anyone will buy loans from Mortgage Master, Hanifin has to document that they are safe by getting the homes re-inspected. After the mess in the mortgage market, he says, everyone is super careful.
"In fact we just got another e-mail this morning that many of the investors not only are requiring re-inspections externally, but are requiring internal inspections as well," Hanifin said. That means some appraisers may have to go out a third time.
Lorenz avoided that. More than a week after she was supposed to close, an appraiser found time to swing by her new home, snap a picture, and fire off a report to her lender. The sale went ahead. She closed Wednesday and Thursday she’s moving out of her old house.
"I thought I was going to be nostalgic about leaving here," she said. "No more nostalgia! No more. I am so ready to get out of here."
Besides the delays, there is also a new reality for anyone buying a home in any of the state's disaster area counties: banks are passing the price of the reappraisal on to buyers. Normally, that’s between $100-200.
This program aired on April 8, 2010.
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