Last night FEMA made Disaster Declarations for much of Mass, RI and NH (see counties affected below). Lenders are going to require the appraiser go back out and do a re-inspection prior to funding to show that the property is undamaged / unaffected by the disaster. Be prepared for the phone calls. Be prepared to let the appraiser in quickly. Be prepared for potential delays to your closings. Be aware that this is not just Prospect Mortgage, this is going to be the case with any lender.
Here are the counties:
Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk, and Worcester Counties.
Grafton, Hillsborough, Merrimack, Rockingham, Strafford, and Sullivan Counties
Kent, Newport, Providence, and Washington Counties.
If you have questions please do not hesitate to call or email me.
Senior Loan Officer
New lead paint regulations go into effect in Massachusetts on April 22, 2010. Although the new regulations do not immediately or directly impact Realtors® and real estate agents, contractors will now be required to be certified by the Environmental Protection Agency in order to perform even the simplest repairs or renovations to properties built before 1978.
According to the state Childhood Lead Poisoning Prevention Program as much as 30 percent of childhood lead poisoning cases in Massachusetts involve exposure to lead dust caused by renovation work. That is a serious figure considering the devastating, life long effects of lead poisoning. Homeowners who have work performed on their property by contractors, including painters, plumber, electricians and carpenters, must ensure that the contractor is “EPA Lead Safe Certified.”
The rule can be summarized in four parts:
- Training and Certification
Beginning in April 2010, firms working in pre-1978 homes will need to be certified. In addition to firm certification, an employee will also need to be a Certified Renovator. This employee is responsible for training other employees and overseeing work practices and cleaning. The training curriculum for certification, in development with the EPA, will be an eight-hour class with two hours of hands-on training. Both the firm and renovator certifications are valid for five years.
- Work Practices
Once work starts on a pre-1978 renovation, the Certified Renovator has a number of responsibilities. Beginning with distributing EPA’s Renovate Right brochure to the homeowner and having them sign the pre-renovation form in the booklet. Before the work starts the Certified Renovator will post warning signs outside the work area and supervise setting up containment to prevent spreading dust.
The rule lists specific containment procedures for both interior and exterior projects. It forbids certain work practices including open flame or torch burning, use of a heat gun that exceeds 1100°F, and high-speed sanding and grinding unless the tool is equipped with a HEPA exhaust control. Once the work is completed, the regulation specifies cleaning and waste disposal procedures. Clean up procedures must be supervised by a Certified Renovator.
- Verification and Record Keeping
After clean up is complete the Certified Renovator must verify by matching a cleaning cloth with an EPA verification card. If the cloth appears dirtier or darker than the card, the cleaning must be repeated. A complete file of records on the project must be kept by the certified renovator for three years. These records include, but aren’t limited to verification of owner-occupant receipt of the Renovate Right pamphlet or attempt to inform, documentation of work practices, Certified Renovator certification, and proof of worker training.
- The home or child occupied facility was built after 1978.
- The repairs are minor, with interior work disturbing less than six sq. ft. or exteriors disturbing less than 20 sq. ft.
- The homeowner may also opt out by signing a waiver if there are no children under age six frequently visiting the property, no one in the home is pregnant, or the property is not a child-occupied facility.
- If the house or components test lead free by a Certified Risk Assessor, Lead Inspector, or Certified Renovator.
In pending real estate transactions real estate professionals should be certain that homeowners are aware of the new regulations, particularly if a seller is doing renovations or repairs to the property in preparation for the sale. Without doubt there will be a new form or two to be executed at the time of listing and or at closing.
Buyers purchasing properties constructed prior to 1978 (and there mortgage lenders) will certainly be looking for representation from sellers that the property is in compliance with the new regulation. Expect to see new language included in purchase and sale agreements accordingly.
Of course the EPA has published a list of frequently asked questions about the RRP Rule:
Key Features of RESPA Reform
New style 3 page Good Faith Estimate (GFE):
- Must be provided to borrower within 3 days of receipt of a complete application.
- Must match HUD-1 at closing within certain tolerances.
- Except for “changed circumstances” GFE cannot change prior to closing.
- Changed circumstances – is defined as: (1) Acts of God, war, disaster, or other emergency; (2) Inaccurate information being relied upon, (3) New information particular to the borrower or transaction that was not relied upon; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.
New style 3 page HUD-1 Settlement form:
- HUD-1 Settlement Statement must match GFE within certain tolerances.
- Lender must correct any intolerance within 30 days of closing.
With limited exception fees quoted to a borrower on GFE cannot change prior to closing:
- Lender Fees and Points cannot change.
- Some settlement fees can change up top 10%.
- Fees for borrower chosen services may change.
- Escrows for taxes and insurance and per diem interest may change.
Truth in Lending or Regulation “Z” Changes
- The lender may not collect any fees before the disclosure is provided, except for a reasonable fee for obtaining a credit report.
- The closing may not take place until expiration of a 7 day waiting period after the consumer receives the early disclosure.
- If the annual percentage rate (APR) changes by more than 0.125 (1/8th) of a percent, the lender must provide a corrected disclosure to the borrower and wait an additional 3 business days before closing the loan.
- A copy of the property appraisal must be delivered to the mortgage applicant at least three days prior to closing.