renovation loan consultant

[Drew Farnese]

Hey guys, forgive me because I didn’t search too much in advance. I’m at work and browsed as much as I could on my lunch break but to no avail…

I’m buying a Fannie Mae Homepath house and getting the Homepath renovation mortgage. This will be my primary residence so I’m purchasing with 5% down. The renovation loan is for 23K. I am now only 16 days from settlement and my mortgage guy calls saying I now need a Renovation Specialist Consultant to come out and - consult- for a 600$ fee.

I understand why this step may be required, but after talking to the guy and understanding the service provided, 600$ sounds extremely high.

My questions.

1. Is this service required on all renovation loans over a certain dollar amount?

2. Shouldn't my mortgage specialist have told me about this LONG ago?

3. Is $600 a fair price for this service?

Thanks in advance guys!

-Drew

[Dion DePaoli]

Never heard of such a position.  Sounds like BS.

The HomePath Renovation lending process is:

Loan Processing Phase

1. Borrower selects property, lender, and contractor.

2. Lender pre-qualifies borrower, ensures that property is eligible, and approves  contractor.

3. Borrower submits contractor's plans to lender.

4. Appraiser reviews plans and determines as-completed value.

5. Lender calculates maximum renovation amount and maximum mortgage amount.

6. Lender underwrites loan and the loan closes.

Renovation Phase

1. Lender establishes escrow for renovation

2. Contractor completes work.

3. Lender inspects to confirm work is completed

4. Lender disburses renovation funds in escrow to contractor

5. Upon completion, lender performs the final inspection, obtains title insurance endorsements and reconciles and closes escrow. 

Underwriting would not need a Renovation Specialist if they approved the contract, that is sort of the contractor's job.  Underwriting has a actuary table to use to underwrite costs and fees and will only lend on what they feel is proper.  

That I know of, the only two folks who would have affinity over such matters is a licensed residential property appraiser and the certified Fannie Mae underwriter.  

So, personally, I would pay or agree to this specialist at all.  I would also now be concerned about the loan in general and perhaps call and talk to his boss about the whole thing.