Won't refinance without repairs?

[jaycat]

What is the name of your state? FL

It's a long story, so I'll try to make it short. The owners of the house we rent are taking out a home equity loan to replace the siding and they recently had the house appraised.

The owners also claim they decided to refinance while taking out the home equity loan. They said the appraisal stated the place needs to be painted and new carpet put in. But the house was appraised at a very decent rate, far above what I imagine they would take advantage of, especially since they told us they were surprised at the appraised value (twice what they paid for it 19 years ago) and obviously were only looking for enough equity for the siding repairs (and the mortgage would most likely be quite a bit higher than our rent if they took out a loan on the full appraised value). The owner just said today that he can't wait to see what the value will be once the carpet and paint are done and he has the place reappraised.

Anyhow, they're claiming they can't get the refinancing through Wells Fargo without having the carpet and painting done and they need to disrupt our lives ASAP to do this work, even though the repair work on the outside began over a week ago (I'm thinking they already got the loan). My husband called Wells Fargo and they said they've never heard of such a thing.

We're thinking they were so shocked at the appraised value (they live out of state) that they now want to sell ASAP and would rather do all the work while we're here so the place isn't vacant for very long (even though our yearly lease isn't up until Aug.--we've been here for over 7 years).

Okay, I think that's enough info and reasoning behind why I'm doubtful to the truthfulness of their claim. Has anyone ever heard of a refinancing being refused due to the place needing new carpet and paint?

I appreciate any info; thanks!

 

[seniorjudge]

Such a thing is possible. Likely, no. Possible, yes.

 

[Bigfoot]

So let the landlord be responsible for moving your furniture, etc. and consider the joy of enjoying new paint and carpet for several months! Besides, if you catch the landlord in a lie, what possible benefit will it be for you?

 

[JETX]

And it is probably a good idea to start considering where you want to live next August as it is probably a good bet the that the landlord won't renew the lease this time.

 

[jaycat]

Thanks, guys. Even though I'm fairly certain this guy is asking for money far below the appraised value--making a couple thousand dollars in aesthetic repairs unnecessary--you just never know.

As for why I'm concerned: The most important reason is that I think it's possible they're using the refinancing thing as an excuse to come in here and inspect the carpet. The owner has already commented to us, after looking at the appraisal, that he upgraded the carpet when he had this house built 19 years ago (to what, 20 year carpet? Ha!); in other words, if there's something wrong with it it's OUR fault. So I think they're trying to set up something to complain about and kick us out (I like to be prepared for stuff that serious). He truly said he was surprised at the value of the house now and even more excited to hear what it's value will be once the carpet and paint (and the siding) are redone.

There's a million other reasons why I can't just jump for joy at the thought of these things being upgraded, but as a tenant I do have some rights. I don't want to move out of my house to a hotel for almost a week (with two boys ages 10 and 4--Yikes) with strangers touching my belongings in every square inch of my house--especially for an unneeded remodel. It would probably take a week of preparation with our busy lives just to prepare them to come in here (the house is 1700 sq. ft) for those kind of endeavors (we'd have to clean out lots of closets, box tons of things up, clean up our 15 x 15 loft, aka storage area), and they want to begin like yesterday. I also have nowhere for my pets to go. Oh, and I don't want a brand new carpet with pets and two young boys to have to worry about. These things are concerns only if it makes it that far, but I'm more worried about being kicked out over the carpet.

Yeah, I'm verbose, but I just wanted to clarify. Merry Christmas!

 

[FloridaRob]

If the appraiser made the appraisal "subject to" the carpet and paint being completed, then yes, the lender will require the repairs to be done. The value will not change once the repairs or done because the value was based on a
"subject to" condition, meaning the value will be XXXX when the property is repaired.

I am not sure if you have to move out during repairs. I would think your lease preceeds anything the owner wants to do with the house. You have paid for the right to live in the home as long as the lease allows. I would think you would not have to get out.

And why would you have to leave to put carpet down and paint. Just had new floorings and painting done in my home and worked around it. This is not major reconstruction.

 

[jaycat]

Hi, Rob; thank you for your input. I doubt it was a "subject to" appraisal since the owner said he's having it reappraised after the siding, carpet and paint are done. Plus the appraisal without that work was listed about 20-30k less than other units exactly like this that have sold in our community recently--it's a townhouse. I also asked the appraiser if the carpet was a big issue, and she basically let us know that it was a non-issue; I don't remember exactly what she said, but something about it being listed with other regular wear and tear items.

About moving out: the realtor and the owner both said they want us to move out while the work is done, but if it must be done I'll tell them that it's not feasible for us and see if they can work around us. Thanks.

 

[JETX]

I doubt it was a "subject to" appraisal......
Even though I'm fairly certain this guy is asking for money far below the appraised value.....
We're thinking they were so shocked at the appraised value.....

Bottom line.. YOU have no idea what the REAL facts are in this situation, and for some reason you seem unable or unwilling to talk with the ONLY person who has them.... your landlord.

We can sit here and play 100 questions, or try to guess the real facts, all day long.... and never give you satisfactory answers.
TALK WITH YOUR LANDLORD!!! Once you have done that... and have REAL FACTS, let us know and someone will try to give you LEGAL advice on the REAL SITUATION.

 

[jaycat]

JETX, I've spoken to the realtor and the owner on numerous occasions; that's where I've gotten all of this information from. I know from the owner that they've held the mortgage for almost 19 years; that the home equity loan is for 17k; that the house appraised at 105k--almost twice what he says he paid for it; who they're refinancing it through (the same company the original mortgage is with--Well's Fargo); that he was "shocked" at the appraised value and that he can't wait to see the value after he has it reappraised.

My entire problem is that I think they're not being straight with me; hence the reason I asked about the necessity of new carpet and paint needing to be done before a refinance.

We're waiting to hear from the owners again today. I'll post anything pertinent that I find out.