Agent

Mortgage market ‘driving blind’ on defect disclosure

Little attention paid to potentially disastrous conditions
Published on Apr 27, 2004

Dear Barry, As a mortgage broker, I'm concerned that home inspection reports are never included with a loan application. This risky pattern of mission came into focus last week when I hired a home inspector for a house I'm buying. My inspector found construction defects and safety violations in a home that is only 3 years old and appears in perfect condition. When I consider how casually and routinely my company and other lenders approve home purchase loans without any disclosure of property defects, I realize that the mortgage profession is essentially "driving blind," handing out six-figure loans on properties we know very little about. What can be done to close this major liability gap? –Ralph Dear Ralph, The lack of apparent concern for property defects is a transparent oversight of the mortgage loan business. In the same way, it is a shortcoming consistently practiced by the homeowners insurance industry. Mortgage loans and homeowners insurance policies are customarily writt...

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