Mortgage Grapevine

Cesspools.

FHA hand book says cesspools are acceptable, bank says no. This is a refi. Any comments?


by Billy The Kid November 6, 2009 1:34 PM

BTK-

arguing with the UW is like arguing with mom- at any point, she can trump you simply by saying "because I said so"....and there is nothing else you can say or do.

I'd imagine your lender has some sort of lender level overlay- meaning that even if the FHA is okay with guaranteeing a loan secured by a house with a cesspool, the lender is not willing to lend THEIR money on such collateral.

Don't waste your time time trying to change their minds...try to find a new lender.


by XpressOH November 6, 2009 1:45 PM

FHA says credit score is not a determining factor in loan approval....

Bank says no to sub 620 score....

DU says approve eligible no VOR... lender says 12 months cancelled checks needed....

do I need to go on?
by Donktard Borker November 6, 2009 1:46 PM

I agree, Xpress, that's why I posted. I'm wondering if all the lenders are the same with this issue.

I had problems years ago with a cesspool, I can't even remember what the outcome was. I think it went down the tubes.


by Billy The Kid November 6, 2009 1:51 PM

yeah....gotta hate those shithole loans....

(sorry...should have tried harder to resist posting that...)

I'm just a one man shop, so I don't do FHA. Good luck finding a lender for that one BTK.
by XpressOH November 6, 2009 2:08 PM

No, DB, I know the drill.

I didn't put much time into this, just took an app and pulled credit. Then they mentioned the cesspool. Credit in the 700s, DTI good, LTV works, slam dunk. Then, "by the way, we have a cesspool."


by Billy The Kid November 6, 2009 2:16 PM

Who is the current lender Billy?

Any chance of running it back there?


by TennesseeTuxedo November 6, 2009 2:21 PM

They used a local bank, Tux. As soon as they mentioned the cesspool I thought of that.


by Billy The Kid November 6, 2009 2:30 PM

Which FHA lenders do you have at your disposal?


by TennesseeTuxedo November 6, 2009 2:33 PM

kinda like "by the way the property is"-

pending short sale
single wide mfg
on 50 acres
a working farm
houseboat
condotel
hostel
site of previous satanic rituals
meth lab
condemed
alpaca ranch
geo-dome
bio-dome
berm home
church
lighthouse
chicken shack
photo-mat (remember those?)
log home
hollowed out living tree
barn home
litterally a barn
lean-to
tee pee
grass hut
space ship
old missle silo



by Donktard Borker November 6, 2009 2:39 PM

Tux, I use warehouse lenders that sell to the big banks. I find it to be faster and it works for me.

I doubt if this loan is going anywhere, no big deal.

I'm taking it easy today, we are moving to our new location tomorrow. I just figured while I'm killing time today I'd post this on the vine just for the hell of it.


by Billy The Kid November 6, 2009 2:45 PM

log home

by Donktard Borker November 6, 2009 2:39 PM

Man, log homes used to be my niche. I miss M&T Bank, IndyMac, and Accredited.


by TennesseeTuxedo November 6, 2009 2:46 PM

you refi'ing Barack's place?
by Masher November 6, 2009 2:49 PM

Grass Huts $ Tee Pees, Are they not loaning on those anymore? They were selling for $700,000 with leased land, loaning 125% ltv, No Doc, 500 min fico, paying 3 pts. @ 6.99% interest (2/28) here in CA a few years ago!

by Lakeside Lending November 6, 2009 2:52 PM

Good luck on the move Billy.


by TennesseeTuxedo November 6, 2009 3:00 PM

Thanks, Tux. It's a great location, lots of traffic and it's on a corner with a traffic light. When they stop for a red light I can run out and drag them in at gun point.

Remember, I'm in Pa. and we still cling to our guns and religion. At least that's what Obama said.


by Billy The Kid November 6, 2009 3:11 PM

Remember, I'm in Pa. and we still cling to our guns and religion. At least that's what Obama said.
by Billy The Kid November 6, 2009 3:11 PM

A lot us still do in CA too.


by Lakeside Lending November 6, 2009 3:14 PM

I would try one of the FHA lenders that seem to think a little outside the box.

Metlife
Freedom
First American Mortgage Trust
US Bank


by Vinnie The Leg Breaker November 6, 2009 3:36 PM

Thanks, Vinnie. I'll check them out but I've got my doubts about this one.


by Billy The Kid November 6, 2009 3:42 PM

Donktard - you forgot to mention by the way property is a "pole barn" or has "metal siding"


by LanceB November 6, 2009 4:11 PM

Now that I think about it, I can't believe they allow cesspools anywhere. I would think the EPA would be all over that. Isn't that just a pond full of raw shit. I just had a septic fail on a rental property as there is too much oxygen in the discharge. Local county health dept. says they are just going by EPA guidelines, so how the hell could a pnd full of shit comply with the EPA. I would think the oxygen would be a good thing; hell we need that to live.
by Vinnie The Leg Breaker November 6, 2009 4:25 PM

Donktard, you must be doing loans in East Portland through mid Oregon state. One of my first applications here in 94 was a house made of hand piled/mortered rock with a dirt floor. I kid you not.
by JustplainMarvin November 6, 2009 4:36 PM

That's ok Marv-

They tried to get me to "empty out" the automatic coffie pot hooked into the bulidings water when I started...


I did actually as an underwriter have appraisals for-

A converted school bus

Home with 3 walls (the back of the house was missing), and appraiser marked "as is"

"Tree house" (I guess) it was a building on stilts in the middle of the forrest...Still don't know what that was or why anyone wanted it, but I declined it due to having no public access.

and also declined for no public access was a trailer still on chasis complete with hitch on a parcel (no joke here) in the center of a mile road field in western Kansas.. there was a muddy two track to the property...I think they just pulled it in there and left it the night before...
by Donktard Borker November 6, 2009 6:11 PM

Large cesspools are now banned nationally by the EPA. If large cesspools are banned, why should small cesspools be considered any differently?

From http://www.epa.gov/safewater/uic/class5/regulations.html

In 1999, EPA added new requirements for large-capacity cesspools and motor vehicle waste disposal wells. The Class V Rule prohibited new large-capacity cesspools and new motor vehicle waste disposal wells nationwide as of April 2000. The rule also phased out existing cesspools nationwide by April 2005.

Why has EPA banned large-capacity cesspools?
EPA has banned large-capacity cesspools because untreated sanitary waste from cesspools can enter ground water and contaminate drinking water sources. This is a concern because:

Cesspools are not designed to treat sanitary waste
Cesspool wastewaters often have higher levels of nitrates and coliform bacteria than are allowed in drinking water
The wastewater may contain other pollutants such as phosphates, chlorides, grease, viruses, and chemicals used to clean cesspools and
Areas of the country that rely on cesspools are more likely to rely on ground water for their drinking water supplies. (Contaminants from cesspools could flow into this ground water.)
by breez November 6, 2009 7:18 PM

Billy,
I have done loans with cesspools for waste treatment. Only acceptable if it is common and typical in the area, and at least two of the comps have cesspools. Hope this helps. I am going to assume this is in Susquehanna County?
by McC November 6, 2009 7:41 PM

HELAM is a cesspool, why dont you ask him how it feels to be rejected all the time?
by FreshMeat November 6, 2009 11:41 PM

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