topic Re: Temporary Occupancy Certiticate. Borrowers risks? in Mortgage Loans

Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Thu, 20 Apr 2017 19:47:11 GMT

I'm FHA loan approved. I'm going through my builder's lender .. my builder is mortgage broker. The closing date is already set for next month but the builder said we would go on closing with a Temporary Occupany Certificate - the loan will be held in escrow. The whole house - both interior and exterior will be completed 100% However the backyard and the front area will be pending. With the temporary Occupany ceritifcate, what risks a borrower can face? Please throw some insight

Re: Temporary Occupancy Certiticate. Borrowers risks?

StartingOver10 — Thu, 20 Apr 2017 21:04:05 GMT

@Anonymous wrote:
I'm FHA loan approved. I'm going through my builder's lender .. my builder is mortgage broker. The closing date is already set for next month but the builder said we would go on closing with a Temporary Occupany Certificate - the loan will be held in escrow. The whole house - both interior and exterior will be completed 100% However the backyard and the front area will be pending. With the temporary Occupany ceritifcate, what risks a borrower can face? Please throw some insight

I have sold many homes by builders.

What I have personally seen, with my own two eyes, is that the builder becomes less motivated to do the pending work - no matter how small - once you close. Then getting the builder back out to complete the work is a nightmare.

I have never seen an entire FHA loan held in escrow though. I didn't even know that was an option now. Years ago you could escrow for repair-type items, but not now.

Maybe the LO's here can tell their experience with "escrowing the entire loan"...

Re: Temporary Occupancy Certiticate. Borrowers risks?

DallasLoanGuy — Thu, 20 Apr 2017 21:24:32 GMT

never had a borrower close on a temp

and for the reasons stated above.... i wouldnt.

the builder wants YOU to pay interest on the incomplete transaction... instead of them.

i would say no

i also wouldnt get legal real estate advice from a forum. call an attorney

Re: Temporary Occupancy Certiticate. Borrowers risks?

StartingOver10 — Fri, 21 Apr 2017 01:21:24 GMT

^^^Agree with DallasLoanGuy - speak to a good real estate attorney NOT associated with the builder or the builders title co. An independant attorney.

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Mon, 15 May 2017 14:36:12 GMT

Back to this topic - the appraisal showed pictures of couple of houses as comparables that are closed with Temporary Occupancy Certificate. This builder is a very big company and they mentioned that it is a standard practice especially when the construction start in winter (january). I kindof agree with the unfinishable landscaping because it was raining way too often as well. I'm just praying that I would not lose the house after closing and having keys in my hand with TCO. Please give me some encouraging words - i do not have time to argue with builders on this.

Re: Temporary Occupancy Certiticate. Borrowers risks?

StartingOver10 — Mon, 15 May 2017 14:58:06 GMT

Sounds like you made your decision anyway.

I especially wouldn't do it if it is a large builder. There is no incentive at all for them to finish the landscaping once you close.

If you are hellbent on going down this road - get an attorney to look out for your interest and prepare a post closing agreement for the builder to sign regarding doing the incomplete work. Don't go on the word of the builder, that is a receipe for disaster.

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Mon, 15 May 2017 15:12:27 GMT

if you feel its a recipe for disaster, what do you think the consequences would be?

Re: Temporary Occupancy Certiticate. Borrowers risks?

StartingOver10 — Mon, 15 May 2017 16:57:58 GMT

the work won't get done. the builder will get his funds and you won't have a leg (or leverage) to stand on,

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Mon, 15 May 2017 16:59:29 GMT

@Anonymous wrote:
Back to this topic - the appraisal showed pictures of couple of houses as comparables that are closed with Temporary Occupancy Certificate. This builder is a very big company and they mentioned that it is a standard practice especially when the construction start in winter (january). I kindof agree with the unfinishable landscaping because it was raining way too often as well. I'm just praying that I would not lose the house after closing and having keys in my hand with TCO. Please give me some encouraging words - i do not have time to argue with builders on this.

Single most biggest investment/decision of your life and you dont have the time to discuss with builder.

Find the time.

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Mon, 15 May 2017 17:13:41 GMT

You mentioned that it's a larger builder, which means losing money worrying about what your grass looks like may not be the biggest concern for them.

You not moving in the house until everything is done IS a big concern for them because they are responsible for all payments toward the house until you take possession of the house. That's the incentive they have to finish the house and to do everything in accord to your liking.

Also, I don't know about your builder, but with my builder there's a check-in that's done at 6mo and 1yr post construction to fix anything caused by wear and tear from the house settling after the first year of construction. If yours does this, I would imagine because you moved into an unfinished home, there will be a big debate about what they will and won't fix because they could easily say you did the damage.

More importantly, why do you want to pay interest fees that the builder is accruing when they should be responsible for it? New construction homes takes a lot of TIME and patience. If you rely on what the builder says all the time you may very well end up screwed in the end. I agree with Junie, find the time.

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Tue, 16 May 2017 15:44:22 GMT

The only pending is landscaping. How can anyone damage a lanscaping when it is full of dugged out sand? Moreover, those snapshot are already there in the appraisal report. The whole building both interior and exterior is already complete 100% anyways. I also checked with my neighbours.. couple of them also closed with TCO and they were told builders getting to it in the order the closures were done. At this point, I'm moving on..

Re: Temporary Occupancy Certiticate. Borrowers risks?

Anonymous — Thu, 22 Jun 2017 16:04:25 GMT

Update:

My loan was closed on May 22nd. The builder laid down the SOD yesterday as their promised before closing. so exterior pending work all complete. They will get me my permanent occupancy ceritificate shortly. Just thought .. i wanted to sharethis.. sometimes we just have to go with our instinct!

Re: Temporary Occupancy Certiticate. Borrowers risks?

StartingOver10 — Thu, 22 Jun 2017 22:25:25 GMT

@Anonymous wrote:
Update:

My loan was closed on May 22nd. The builder laid down the SOD yesterday as their promised before closing. so exterior pending work all complete. They will get me my permanent occupancy ceritificate shortly. Just thought .. i wanted to sharethis.. sometimes we just have to go with our instinct!

I'm glad things worked out for you!