HUD Upgrades Appearance, Timing of Key Home Inspection Message
In response to ideas presented at ASHI-HUD meetings in Washington, D.C., HUD has announced a major redraft of the “For Your Protection, Get a Home Inspection” document.
At the same time, the agency has issued a stiff new admonition about the timing for delivery of the document to prospective homebuyers.
The latest revision was announced October 5, 2006, in Mortgagee Letter, 2006-24, from Brian D. Montgomery, Assistant Secretary for Housing-Federal Housing Commissioner.
“Mortgagees are required,” the assistant secretary said, “to provide the document to prospective homebuyers at first contact, be it pre-qualification, pre-approval, or initial application. In any case, the mortgagee must provide the form to the prospective borrower no later than initial loan application.”
Rob Paterkiewicz, ASHI executive director, said, “the big plus now is that this form is to be handed out by the mortgagee ‘at first contact.’ This is a huge change over previous practice, when the real estate agent was required to provide it at the presentation of the purchase contract. There were countless reports of homebuyers never receiving the form. Now, everyone who discusses obtaining a mortgage, even pre-approval, will get this notice.”
It is the strongest official public message regarding the timing of delivery, a critical issue. It is one of the key requests ASHI has made to HUD. We can be pleased that the agency responded so positively and forcefully.
The form, HUD-92564-CN, is used to inform FHA homebuyers about home inspections. It is HUD’s flagship message to homebuyers, urging them to obtain a home inspection. It explains that an appraisal is not a home inspection, that HUD does not guarantee the condition of a home, and that a home inspection is the consideration of the homebuyer.
It is a tool to communicate a strongly positive message about home inspections to millions of homebuyers from the federal government’s perspective. As such, it is a primary focus for ASHI’s government affairs contacts with HUD.
In April 2004, the Department of Housing and Urban Development (HUD) first responded to ASHI concerns about the form by making initial revisions. That action was the result of a meeting among ASHI representatives, senior HUD staff and Appraisal Institute staff held at HUD headquarters in Washington, D.C., on September 23, 2003, and subsequent follow-up meetings.
Continued lobbying led to this latest revision. In his Mortgagee Letter, 2006-24, Montgomery said the purpose “was to create a more conspicuous, easy-to-understand document that informs homebuyers of the availability and importance of getting an independent home inspection. The form also provides clarification of the differences between an appraisal and a home inspection and stresses the importance of radon testing.”
The new form has a distinctly different appearance designed to attract special attention from homebuyers. Specifically, it includes large-print “Caution” messages in the border. The new look and “Caution” motif in the border answer recommendations from ASHI that the form be upgraded in its appearance to be certain to attract attention in the pile of paperwork. It looks like a warning that will command the attention of homebuyers, prompting them to stop and think seriously about getting a home inspection. This was an idea inspired by ASHI, and we thank HUD staff for listening and responding.
Congressional Hispanic Caucus Invites ASHI to DC Home Purchasing Conference
Photo: (L to r) Randy Pence, ASHI’s lobbyist; ASHI Member Joey Caballero; N.Y. Rep. Nydia M. Velazquez, and ASHI President-elect Frank Lesh.
Impressed by what it heard during a brief appearance of ASHI representations on June 29, 2006, the Congressional Hispanic Caucus (CHC) invited ASHI to a public conference on homebuying for the U.S. Hispanic market. The conference was held October 2, 2006, at the Mayflower Hotel in Washington, D.C. ASHI President-elect Frank Lesh represented ASHI at the podium with representatives from the realty and mortgage finance industries. ASHI Member Joey Caballero, Boynton Beach, Fla., also participated.
ASHI sees CHC as a conduit for a strong, positive message targeted to the Hispanic homebuyer market, which is growing at a rapid rate. ASHI hopes to expand the positive message from Capitol Hill to all homebuying markets. ASHI plans to help many congressional offices adopt a pro-home inspection message in their direct mailings to constituents.
Each member of Congress routinely communicates with more than half a million constituents. ASHI’s message to the CHC, and, more broadly, to all on Capitol Hill, is that there is strong public policy justification to advocate voluntary home inspections; thus, members of Congress should extend this message to their constituents. Of course, this would be done at no cost to ASHI or its membership.
During the Mayflower conference, Rep. Nydia M. Velazquez (D-N.Y.), who chairs the CHC, spoke persuasively and at length on the need for home inspections. She joined Lesh at the podium to reinforce the need for the Hispanic homebuying market to obtain home inspections as an integral part of the homebuying process and strongly endorsed obtaining voluntary home inspections.
Aside from her key role on the CHC, Rep. Velazquez is a member of the House Subcommittee on Housing. Should the Democrats take control of the U.S. House of Representatives, she is poised to assume the Chairmanship of the Committee on Small Business. ASHI is honored and pleased to work with the New York Member of the House.
ASHI has been working with representatives from HUD for more than five years and will continue to do so. The relationship with CHC was forged more recently, as ASHI took steps to help its membership serve the Spanish-speaking market and to help Spanish-speaking consumers learn about the benefits of a home inspection.
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