Client /REO issues

Client is buying a home that had the water shut off,but in my report I observed a split copper line near the main.

Client wants to have Plumber turn on water so I can examine plumbing, because FHA only loans out if the place is habitable.

Bank says repair is not allowed without ownership.

Plumber sure will not be turning on water , buy re hooking the main ,if the pipe is split.

Anyone else run into this type situation ?,as it seems like a catch 22.

Are these Banks run by morons ?

Yes, and yes they are. They want to unload the large inventory, but don’t want to do anything to help a buyer out if it’s going to cost them any more money. So, buy at your own risk. I like the ones that sell your report after the first buyer walks, and then claim that they are obligated to disclose. True, but you don’t need to sell my report, just disclose the defects, not a photocopy of my darn report. Sorry, had to get that off my chest.

That bothers me.
Are we missing some big picture here or something?
Never mind , your second yes says it all.

Just wondering if these guys ever have a work around for the issue?

I really can not figure the mindset.
The place was even winterized, yet those guys have no liability to come back ?

I need in on this racket.

I hear ya Bob. It is nerve racking sometimes. Ya do the best inspection you can for people and you know they are gonna be left holding the bag.

Nah , I disclaimed and noted what I did see.
In this case a outside utility room connected to a modular with a HWH that had Asbestos flue.

I was supposed to go back today to meet them and the Plumber,but I called the client and asked if they had the village turn on the water,as both sides of the meter were dis-connected in my photo. :slight_smile: ooooPs

If it’s FHA it has to be habitable, the will not close, gas, water electricity has to be on. either the bank has to repair or your client should look at a new place,
I did one a month ago, it was an FHA auction, client was getting FHA loan, missing copper, FHA will have to repair to sell and guarantee the loan.

  1. Do not look for a “work around”. Not your job and you are not a licensed plumber.
  2. The water dept is VERY possesive of their jobs, in Chicago, and doesn’t want ANYONE messing with the buffalo box.
  3. Banks and not in the property management business (at least they are not qualified to be so, and do not know what they are doing).
  4. Many young (and un-informed) buyers believe that they can game the system and buy a house, really cheap, and fix it themselves. I (try) to warn them away. Some have come back, later, and tried to sue me for it, but I just explain that I warned them (verbally, at the time of the inspection, and in my report) that they were making a mistake. Seems like a bunch of college educated young folks believe "Hey, a high school grad plumber (or electrician or carpenter or latino illegal can do it! I have a college degree! How hard can it me.)

BTW: Most of their “college degrees” are in art history, english or history. :mrgreen:

I always advise to have the work done my licensed and insured contractors and NEVER try to get around the system.

Safer that way.

You gets what you pay for and a cheap job is ALWAYS more expensive than a professional job, in the long run.

Hope this helps;

Bob, The buyer has to pay to have the home winterized after the inspection.
The larger problem is the gas co will not turn gas back on if the meter is locked if the bill is not paid, property is still in legal limbo. more cash for the bank and the guy that does the winterizing.

Will, thanks for turning a simple question about what can be done ,into lecture on me somehow.
I simply am wondering what the answer is here,
You did not provide one .

I was looking for a real human answer and not something from the Lawyer forum.

Come on Will you can do better than that.

By work around ,I was not looking for some underground , underhanded ,crooked way of doing things, but that somehow made me feel dirty the way it was answered.
I am open ,above board and just looking for ways to help my clients any way I can.

Please let me add that another area Inspector called me today and was mad that they had to cancel his Inspection at the last minute because of lack of utility services,so since you are in the same line of work as the rest of us do you just ignore what is going on or do you have a recommendation you can share or(should I say willing).

As professionals, I think everyone is already aware of what you stated above.

Jeff what bothers me here, is that if a weatherization takes place , is not that same company holding that contract responsible to come out and turn it on when requested?

I feel as if this whole thing is a racket.

Just today I had a buyers Agent tell me how it is difficult to get a hold of Bank rep Agents to even look at a place.
Makes me go Hmmmm.

Are these Agents holding out for big tuna Investors, “in your opinion” or is this just corporate mentality and the Agents are getting a smaller commission that makes them lazy or non -caring to get a deal done.

I can’t help but think the banks are waiting for the big kahunas. Sell em off in lots, no inspection, no FHA, wholesale.

If they’re THINKING at all. The sheer waste… the loss and damage to vacant properties over the last 2 years is, in my opinion, one of the most under-reported stories of the decade.

Thank You
I agree whole heartily.


If I were running a business that had a large inventory of vacant property that was doing nothing but costing me money I would find a way to turn them into revenue generators, either by sale or lease.

To let the properties sit and deteriorate and loose value is shameful at best.

How hard would it be to hire a company with the ability to maintain the property and either rent it or sell it? Seems like that beats letting it fall apart.

Looks like an opportunity was missed by many.

The banks need to show a loss on their holdings to be backed by Uncle Sam. I spoke with a builder several weeks ago who said a banker told him that they don’t get $$$ from the government on properties that are not distressed. Hope and Change.

Banks, apparently, will get paid when they sell the property. If it was mortgaged for $200,000 and they sell it now to someone else for 80,000 our fine government will send the bank bailout for the other $120,000.

It doesn’t appear there is a downside for the banks.

Sorry no links, just a few conversations with some financial people I know.

Now that is interesting Larry. Might have to do some digging around on that one. It seems from what we have witnessed, to make sense though. If this were true, they would have no incentive to get things turned on and/or maintain a home. They are getting their cash no matter what, so poo on the buyer.

Now ,I am beginning to see cracks of light in this whole scene.
Hopefully more will join this discussion from the present perspective ,without this degenerating into a typical political spitting contest.

Defiantly like the line of thought so far.

Appraisals take place upon a Bank taking back a property I am sure,so is that what we are looking for here.

If a Bank appraises it at a higher price,they would get even more Federal money.

If a Bank sells it for one dollar and still gets the rest anyway,where is the incentive to even ask for $50,000 if $1 will get them the same profit.

Piece of this puzzle is still not here.

Making a $1 asking price would get them the Fed money even faster,No?

But then they wouldn’t need to write a mortgage for $1. :wink:

I think you mean “definitely”.

Your word:
de·fi·ant (d


adj. Marked by defiance; boldly resisting.


ant·ly*** adv.*