Hello,

I was wondering if anyone had some insight as how to get some help in this situation.  I am currently in the process of selling my father's home (from his estate) and the only this now stopping this is the underwriter who says the home is a two family dwelling not a one family.  The underwriter is basing this on the fact that there is a kitchenette on the second floor and a set of stairs leading down from the second story.  Of course this second set of stairs leads to the middle of the fenced in and secured back yard.  The home is on record with the city/state as always being a one family home.  It is zoned for only a one family home.  All apprasials have stated it is a one family home and it is insured for a one family dwelling.  How can all records list it as a one family (including the accessed appraisal by the city/state) and one underwriter believe it is a two family home?  Is there anyway to fight this or anyone to file a complaint with?

Thank you.

Is it zoned R1 in other words single family vs multi family? If not, then is there only one service panel to the home? If there is a seperate service panel for utilities to the upstairs that can be an issue. If there isn't a second service panel then I would suggest that you write a very concise letter to your real estate agent and ask them to deliver it to the lender that certifies the property has been only used as a single family residence, there is not a second service panel and it isn't zoned multi family (if that's the case). Also ask the agent to get a letter from the buyer stating that they are going to use the property as a single family home. If the underwriter won't take that then ask the buyer to try a different lender or if they are working with a mortgage broker to try a different lender.

Thanks for replying.  Yes, it is zoned R1 and there is only one servce panel (electric, gas, water, etc.)  It is listed on the field card with city hall as being a one family, and 2 appraisals stating it is a single family unit.  Also a letter has already been sent to the lender stating that it is only zoned as a one family with one servce panel, as well as a letter from the buyer saying it will only be used as a one family.  I'm guessing a new lender is the next step.  I didn't know if there was anyone to file a complaint with since they are contradicting what all of the legal documentaton states.  The other issues was the buyer is a first time home owner so it does not look like they will be able to qualify for the tax credit since it must be approved by tomorrow by the underwriter.  They had stated they were "swamped" with people trying to make the deadline and didn't know if they could do it.

It may be that the lender/underwriter just doesn't like the property. I know that may sound harsh but that may be the reality. Someone should request that a supervisor or head of the department take a look at it too. It appears that there may be 170,000+or-  tax credit buyers that are going to miss out, congress didn't extend the deadline for closing.

Just wanted to post an update... the brilliant underwriter stated last night the reason she thought it was a 2 family home was because she did not realize there was a set of stairs inside the house which is used to access the second floor! Hopefully this epiphany will help.  But honestly, how could it be a two family home if the second floor only had one access?  I am concidering contacting HUD to see if they can review the lender's policy and citeria for certifying thier underwriters.

We all make mistakes and fortunately the underwriter wasn't declining the loan because they didn't like the property. So it sounds like your sale will go through. Also, the House passed an extension of the 1st time homebuyers bill but the Senate must do so too.

Allan,

Be happy this situation resolved itself and don't waste your time or energy trying to file a complaint.  It won't go anywhere, they have much bigger problems at the moment, and since your sale is going to go through you won't get anybody's attention.  If a private company decides to not close a loan and it has not violated any Federal or State regulations (she just misread the appraisal), your only recourse would have been going to another lender.