As smooth as most 203k projects go I hate to write this post. There is about one in a hundred that become what we refer to as "the 203k from hell" because no one seem to get along.
We had one years ago that three days before the project was to be
finished... just three day and we are done... the contractor brought his
foul mouthed wife to the project to show her what he had done. Holy
cow, from that moment it went down hill fast. Up till then everything
was going very smooth.
It turns out her mouth was a "gutter mouth" and she started using the
wrong terms to describe his work and it offended the owner's wife who
was living in the trailer just outside when she heard F this and F that
describing her new home. It was all good just bad choice of words and to
a religious person it was about to blow sky high. The owner asked her
to leave NOW and that she didn't appreciate the language being used in
her home. The contractor's wife being from the gutter didn't take kindly
and finally the owner kicked them both off the property. The contractor
was fired and not allowed to complete the small amount of work left,
We took another month to find an acceptable contractor to complete the
project but who would have guessed that could even happen? Not me. There
was no resolution, they weren't going to be allowed back into the home
for any reason. Up till then the project had gone very well.
Who knows what that "last straw" might be?
What happens when there is $30,000 in work completed for the first draw and...?
...and none of the work done was listed on the scope of work? YIKES!
This luckily hasn't happened to me but it did happened to a friend of
mine in NJ and twice in three weeks. My question to him the first time
is how was he going to pay it out? He answered correctly... "I can't pay
for any of the work that was done as it isn't' on my list of repairs" -
that is exactly right.
When it happened the second time, I had to question his consulting
procedure. It seems to be flawed. You need to be very clear on staying
with the "scope of work" as outlined in the bid specs because that is
what the appraisal was based on and it MUST BE COMPLETED, it isn't an
The house is much nicer than our scope of work laid out...
How do you handle that? I did have this happen on one of my projects and
I was shocked to see the home was much more than anticipated. The
borrower didn't want a draw, the bank called for it to see if anything
was progressing. That is their option and obligation under the HUD
Guideline. When I arrived it was so much more house. I couldn't believe
my eyes. No permit on site, just did the second lender mandated draw and
there is still no permit on site. PERMITS MUST BE POSTED AT THE SITE
FOR AN INSPECTOR TO SEE ANY TIME THEY COME BY. This is also no an
option. The lender was going to call and see if there were permits taken
out. I haven't heard yet.
203k 911 is our solution to your problem 203k project
We have completed so many 203k projects that we have seen most
everything that could happen, happen. We dealt with it and resolved it.
There was some times where I stepped in and mediated for other
consultants live and in person... to mutual benefit of all concerned. It
actually helps us all to resolve issues amicably. The lender, the
borrower, the contractor, all benefit from these services so we now have
a place to go to help get these issues aired and resolved in the least
costly manner. It is 203k911 and it works all over the country.
-Mike Young, 203k Team Leader
With offices coast to coast and HQ now at PMB 168, 5055 Business
Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. 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".