Archive for the ‘Red Tape’ Category

Well, we finally got our revised septic permit after months of waiting. Now we go forth to attempt once again to get a building permit. We still don’t have the money we need to build the house once we get it, but we could at least start and perhaps we would get some momentum to figure out a way to keep going. One can only hope. Merry Christmas.


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We still can’t fathom that the appraisers valued our land so very low.  Even more apalling is the fact that they refuse to budge on the value, insisting that even though it is all permitted and ready to build on that it is worth $50,000 less than it appraised for when we purchased it, not knowing for sure if it was even buildable.  But beyond that, we are baffled at the fact that the credit union is not applying any of the costs we have already paid on the development of the property to the down payment we must come up with.  I sent this email to the mortgage consultant tonight; we’ll see what she has to say about it.  

We had one more question regarding our equity toward the down payment of our loan.  From the very first time I talked to you, I asked specifically if we could apply the construction costs we had already paid towards our down payment.  At the time, you said that we could.  We don’t understand why these prepaid costs no longer are able to be applied to our down payment, as they were necessary costs to build a house on the property.  We have submitted to you a worksheet showing the construction costs that we have already paid towards this project.  These costs include soft costs such as our house plans, truss design, septic permit, a/c layout design, impact fees, and surveys, plus some hard costs for materials.  We have in our possession all of the bathroom faucets and door hardware we will need, plus many light fixtures, some appliances, and so on.  We purchased these items in anticipation of the project and they will be used for the construction of our home if we can ever get the mortgage.  Trust me, we’ve been tripping over all of this stuff for months.

All of the amounts we have already paid can be proven with receipts or canceled checks, which we will gladly provide.  It is customary in the industry to apply these prepaid items to the down payment.  This would be completely independent of the appraisal and has nothing to do with the appraised value, but each time that Andy has mentioned it to you, you stated that we have to go by the appraisal.  We were not disputing that, but these prepaid soft costs would be calculated separately.  The amount of costs towards this project that we have prepaid comes to $37,876.21.  That should be more than enough to cover what is needed for our down payment, regardless of whether the original appraiser chooses to change the value of the land on our appraisal.  Please consider the attached worksheet showing these prepaid items and please forward this information on to the underwriter.  We will supply proof of payment for these items upon request.

Thank you, 

Jen and Andy

From www.allexperts.com“Soft costs: Permit fees, engineering fees, architectural fees and other costs associated with building the home but not directly a part of the actual construction costs. Many times the borrower has already paid some of these costs. To consider these paid items as “equity,” the borrower must document the cost with a bill and a canceled check or a paid receipt.”

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Stoopid appraisers

Well, as I suspected, the appraisers are all holding firm in their determination that our property is worth half of what it was only a few months ago, however ridiculous it may be. It doesn’t really surprise me- the appraisers reviewing the determination aren’t going to go out on a limb to say the other guy was wrong because they wouldn’t want him doing the same to them. They all rally around the original decision and refuse to refute it and take on the responsibility for their determinations.

The mortgage consultant called and said that they refuse to acknowledge the wetland part of the property, and assign no value to it whatsoever. She said that is because the wetlands aren’t worth anything. “What?” I said when she made that ignorant statement. She responded with, “The wetlands aren’t worth anything because you can’t build on them.” I wanted to jump through the phone and smack her upside the head at that moment. That statement just showed her ignorance. For one thing, wetlands are worth anywhere from $30,000 to $40,000 an acre for the purposes of mitigation alone. I told her that she was right that we can’t build on them, but no one else can build on them either, so we would be sure that no one would ever build right next to us. The land is still ours, and we would always have the privacy it offers, plus we are free to enjoy the land in many other ways. I asked her if that had no value, and she replied with some bullshit that we have a lot invested so we are biased. I said “You better believe we have a lot invested, but that doesn’t take away from the facts. We find great value in the privacy and natural surroundings of the wetlands, and we are sure that other people would as well.”

It was very clear in talking to her that she really had no idea what she was talking about. She mentioned some crap about developing lots in other areas of the county that were completely irrelevant to the situation, and she just couldn’t seem to grasp that having 7.59 acres of land was more valuable than having a third of an acre with neighbors right on top of you. She told me how she and the underwriter had put in many hours trying to make the loan work, that they were both trying very hard and spent so much time. I had to restrain myself from saying what I wanted to say, which was “Oh boo-fucking-hoo, you have spent so much time on this mortgage. We have spent the past two and a half years of our lives and tens of thousands of dollars fighting to get this far, with no end in sight. You have no idea what it is like to have to go through all this and I do not feel one ounce of sympathy for you.”

Anyway, the outcome of the conversation was that they wanted to approach the original appraiser one last time to see if he would change the value, and if not it would be possible for us to order a whole new independent appraisal of the property (which is kind of how I thought the field review would be). I said we would authorize the new appraisal (pay for it) if we could be sure that the new appraiser would have no knowledge of the other appraisal. She assured us that they would not be privy to that information.

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The whole field review of our appraisal is not going well. Think about it, what appraiser is going to say that they disagree with another? They wouldn’t want the same thing done to them, so I am sure they vouch for each other. The original appraiser provided us this line of BS: 

“Although it may appear that we are comparing a slightly larger or smaller property to the subject, each adjustment is appropriate in terms of contributory site value.”

What a load! They are considering our 7.59 acres of land as equivalent to a parcel of only .38 acres. Both sites are in roughly the same area and the smaller one has no advantages such as being on the water or being in a nicer neighborhood.

The other appraisers refuse to consider the additional half acre of buildable area authorized by our wetland permits from both the Army Corps of Engineers and the Florida Department of Environmental Protection and recorded OFFICIALLY and legally in the county section maps. They say that they need an official survey in order to do so, and all that we have is a survey that is not a survey.  It is a professional sketch to accompany a legal description, that was done by our surveyor. So, the sketch was good enough for the DEP and the Army Corps and the county, but these nit-picky appraisers need an official survey? My ass! It is complete crap.

And I’ll say it once more; who really cares how much of it is buildable? It is zoned for one single family house, same as all of the comparables. It is already permitted to build that house. So, once the house is completed, the only difference between our property and the comps will be that ours has far more land.  It is completely immaterial that most of it is not buildable as we are only authorized to build one single family house anyway, same as the comparables. Damn appraisers. They are scared of their own shadows.

I finally sent an email to our builder this morning, just to let him know what was transpiring. His response was:

“That just reassures my opinion of appraisers and their entire BS process. You should get a refund on that appraisal.”

We tend to agree.  The latest set of objections I sent to our mortgage person just this afternoon went like this:

“We are not sure why the appraiser needs an official survey, when all that was needed through the entire permitting process was the professional sketch that says “this is not a survey.” The whole conservation easement was recorded with only that sketch, in fact the DEP did not want a survey.  The official county section map reflects the conservation easement as being 6.36 acres, and it readily available on the property appraisers site.  I don’t know how much more official we can get than that.  I have attached a close up of the section map showing the conservation easement, and also the entire section map, which is very current, having been updated this month.  The section maps are way more official than some crummy survey.

We are interested to know about what kind of comps are being used to value the vacant land. If any of them are under five acres and would require wetland impacts in order to build, they are most likely completely unbuildable. The Army Corps of Engineers requires ‘like kind’ mitigation, so the mitigated land must also be on Merritt Island.  There are no mitigation banks on Merritt Island and parcels under five acres do not possess enough land to allow for on-site wetland mitigation such as ours did. That is why the properties under five acres with wetland issues are worth far less.  In addition, some of the vacant properties in the area have even more issues, such as those on the East side of Judson Road that would require a bridge to get across the wide canal in order to build on them.  I am not sure what it would take to get approval from the Army Corps, the FDEP, the St. Johns River Water Management District, and possibly the Marine Fisheries division of the Fish and Wildlife Commission to fill in surface waters to make a bridge, but I am sure it would not be easy.  When we dealt with all of these groups for our road issue, surface water impacts were a big deal.”

So, we’ll see what tomorrow brings.  All I know is that it will be something fucked up that we won’t be able to do anything about until the weekend is over.  I am willing to bet that before this is all over we will require the services of our environmental permitting expert to get this all sorted out. He has saved our asses (for a healthy fee) on many occasions already.

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A familiar theme

I sent an email to our mortgage person at the credit union expressing some of the concerns we had with our appraisal being modified so drastically. The body of it went like this:

We have looked at the changes that the appraiser made and we are really at odds with them.  It just doesn’t seem logical.

First, he judged our property area as being only .73 acres based on the amount of uplands. While that is true, the conservation easement only covers 6.36 acres, leaving 1.23 acres. And it is not as though the other 6.36 acres cease to exist, they are ours to enjoy, just not to build on. This is of no consequence as the zoning is for a single family residence anyway. The problem is that appraiser has this wetland/upland information for our property but not for any of the comps, so how can he compare them?  Without a certified wetland delineation documented on a survey, there is no way he can look at any comp on any lot and know that all of it is buildable. In the area, most properties have some amount of wetlands, or even have other environmental issues or easements. All the appraiser can say from looking at a comp is that there is enough buildable land to build the house that is currently there, and the same thing is true for our land. We have permits in hand, so it is feasible to build on, just like the comps, but there is a great deal more land there than any of them possess. We take exception to the fact that the appraiser listed our 7.59 acres as “similar” to a comp on only .38 of an acre. There is no way that is accurate.

Also of issue is the fact that the value of our property is listed as being $25,000 below what we paid for it. When we purchased the land, it was unknown if it was even feasible to build on, and we had to go through the lengthy and expensive process of obtaining wetland permits from the Army Corps of Engineers and the Florida Department of Environmental Protection. In addition, we had to fight a drawn out battle with the county to get approval to build due to the road status, and finally obtained an unheard of waiver to the offending section of the code. The property is now fully buildable and we have all permits in hand after two years of agonizing efforts. How could the land be worth less now after all of that?

Finally, we object to the speed at which the fully signed and certified appraisal was modified, based on irrelevant documentation to slash $150,000 from our property value in the blink of an eye. The rapid speed with which it occurred indicates to us that very little research was done and that there was very little consideration of the unique aspects of our property taken into account. Our land has its own pond, is very private and secluded, and is large enough that we will never have to worry about anyone building nearby and invading our space. That has  great value to us, and we are sure it would be valuable to buyers as well. The fact that the appraiser overlooked the conservation easement in the first place does not speak well for him, considering that it appears prominently on the county section maps. Is there any possibility of getting a new appraisal from a different source? Please let us know if anything changes, or if there is any other recourse we have.

This afternoon, she called and said that what they wanted to do was a ‘field review’ of the appraisal by a different appraiser, where the new appraiser basically determines if they agree or disagree with the appraisal. I asked her if the new appraiser would have all of the correct information, and she said yes, that we could provide them with all of it. She said that the only thing would be that it would cost us another $300 to have the field review done. I snickered a bit and told her that we were kind of used to that; that we had been hemorrhaging money for the past two and a half years, so we didn’t see any reason to stop now.

A little bit later she called back again and said that the appraisers they had contacted had asked if we could help them with some information. She said that they wanted a ‘report’ from the Army Corps of Engineers.  I told her that we had the full Army Corps of Engineers Wetland Permit, which is lengthy and contains a report, and she said she thought that was what they were looking for. She said they were also wanting a report from the Florida Department of Environmental Protection. I told her that we had a permit with them also, but told her that most of the information in the ACoE document followed the FDEP permit precisely, because generally the ACoE follows the lead of the FDEP in wetland permitting. She said something to the effect of, “Wow, you really know a lot about this stuff” and I replied wearily that yes, we know way too much about it after all we have been through.

After her call, I spent what seemed like forever scanning pages of the wetland permits to send to her. It amounted to about 60 pages in total. I would be willing to bet money that before all is said and done that we will require the services of our wetland permitting engineer to explain things yet again, and for a healthy fee. We are getting so tired of this game.

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I have been a bit of a slacker about updating but it is mostly because there is so very little to tell.  We are still pursuing financing through a local credit union, but it is taking time.  Because the credit union requires us to use an ‘approved’ builder, our builder has to go through their approval process.  He has turned in all of the tons of documents that they wanted from him except one, a financial statement, which his bookkeeper has been preparing.  

Our builder builds custom homes as a side job and because of this his projects are sometimes designed to pay him in the later installments.  He wanted to wait a week or two for a certain disbursement of funds to make it to his account in order for the financial statement to present him in the most positive light to the credit union.  His bookkeeper was supposed to have the statement done at some point last week, so hopefully she came through.  Once he submits that statement it should be a matter of only a few days before he is approved.

I really hope that things can start to move in a forward direction.  It has been so long now that it is easy to lose focus on our goal.  I can’t believe it has been almost two and a half years now.  But then, I keep saying that.


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This is just insanity. How is it possible that with credit scores in the 800s, a good loan to value, and stable employment that we cannot get a mortgage at any cost? I still see ads from places that claim to lend money even if you have bad credit or no credit, but those are ridiculous; no one will lend to you even if you have perfect credit, so if your credit is bad there is no way. It is not just us, it is epidemic, apparently. The lenders have gotten so gun shy that they don’t want to lend to anyone, unless they already have as much money as they need to borrow. Actually, they shouldn’t be called lenders anymore- the name is misleading. It would leave one to believe that they actually lend money. An email from our mortgage broker today said this:

If it makes you feel less picked on, I have a lot loan with this investor that is a 50% loan to value, good quality customers like yourselves and the investor has figured out a way to complicate that and delay the process. I still think the delays could be the result of credit lines being dried up temporarily, but for obvious reasons, the banks are not telling anyone that. No matter who the investor is, the delays are there for weeks and then suddenly the loans are cleared to close and then we hit another period of time of delays after that. It has to be something other than having too much volume. We know there is no significant volume of deals in their pipelines right now.

Our mortgage broker has been doing everything within his power to get us a deal since around November or so. He is just as frustrated with this process as we are. Right now our only hopes of building our house have dwindled down to a longshot from a “lender” that refuses to make a decision, a lottery ticket, and whatever other crazy ass scheme we can dream up. It would take probably take a miracle, but if we could find a private investor that wanted to make a nice, safe investment by loaning us the money and personally holding our mortgage that would be ideal.

I responded to an email this evening about the uncertain status of our loan. My email to our mortgage broker and our builder said:

Andy bought a Lottery ticket on the way home today. That is currently our plan B if this falls through.

Our builder replied back:

Please have Andy pick one up for me too? This mortgage and appraisal business is killing everyone looking to build. I hope they all go out of business starving themselves from the good loans they could have made.

And the mortgage broker said:

I have one too. If I win, I will finance it, personally, at 3% interest, no additional money out of pocket. Maybe that will bring the debt ratio down, right?

Something is seriously wrong in this country.

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