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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Can a lender pull plug on financing if there are illegal additions? Posted by Greg Sharp on January 26, 2010 at 4:47 PM In Reply to: Can a lender pull plug on financing if there are illegal additions? posted by Alfred -- SoCal on January 26, 2010 at 11:48 AM If the addition is non-permitted then it is normally not counted by the appraiser for the loan which can have an impact on your sales price. If the lender discovers that the property has a non-permitted addition of 100SF they can force a re-appraisal excluding this area. Or they coudl cancel. It is their money. It all depends on the appraiser and the underwriter. : No experience with this because my past rehab projects have always been clean and straight forward. : : There is an REO duplex which is a potential buy in LA but there are some non-permitted or illegal additions (laundry room, closet of master bedroom and shower of master bath are extended out onto the balcony... and, there is a garage converted into a bedroom, non-permitted I'm sure, that has a lot of water damage in floor and lower walls, because driveway slopes down towards it.) : If a buyer's lender becomes aware of illegal additions could they halt the financing or is it just up to the buyer? : Even if I cleaned these additions up, could they prevent a sale from occuring? : Also, could I be forced to tear all of this out and put the house back to its original permitted configuration? : Any other feedback or experience would be appreciated. Thanks in advance. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : If the addition is non-permitted then it is normally not counted by the appraiser for the loan which can have an impact on your sales price. If the lender discovers that the property has a non-permitted addition of 100SF they can force a re-appraisal excluding this area. Or they coudl cancel. It is their money. It all depends on the appraiser and the underwriter. : : No experience with this because my past rehab projects have always been clean and straight forward. : : : : There is an REO duplex which is a potential buy in LA but there are some non-permitted or illegal additions (laundry room, closet of master bedroom and shower of master bath are extended out onto the balcony... and, there is a garage converted into a bedroom, non-permitted I'm sure, that has a lot of water damage in floor and lower walls, because driveway slopes down towards it.) : : If a buyer's lender becomes aware of illegal additions could they halt the financing or is it just up to the buyer? : : Even if I cleaned these additions up, could they prevent a sale from occuring? : : Also, could I be forced to tear all of this out and put the house back to its original permitted configuration? : : Any other feedback or experience would be appreciated. Thanks in advance. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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