Home Inspection Provision in Mortgage Bill, Lauded by ASHI
Both home buyers and house inspectors would benefit from the home inspection provision of the Mortgage Reform and Anti-Predatory Lending Act, which is expected to get priority treatment from the House this year.
The home inspection has been lauded by the American Society of Home Inspectors, praising the House Financial Services Committee and Representative Nydia Velazquez for enhancing consumer protection.
The home inspection provision aims to educate first-time home buyers and other home buyers not familiar with the complexities of home buying.
According to a study conducted by the General Accounting Office, there are many home buyers who are not familiar with home inspection and whose views about home inspection are not congruent with reality. A lot of home buyers do not know that house inspections are not done automatically; that valuations are not house inspections; that the HUD recommends voluntary house inspections; that the FHA does not do home inspection; and that they should initiate a home inspection.
ASHI President Bill Richardson said the bill would help home buyers make smart decisions when purchasing a house. He said the effort to educate prospective home buyers before they make wrong decisions is a victory for home buyers across the country.
Under the bill, which was championed by Velazquez with help from Representative Judy Biggert, HUD is required to accomplish a set of activities, such as publishing a home inspection advisory; creating a home inspection booklet for homebuyers; and publishing a FAQ on home inspection.
The HUD is also required to publish the advisories in both Spanish and English, distribute the materials widely, ensure that low-income and first-time home buyers are reached, and include information on both FHA home sales and non-FHA sales.
To ensure that home inspection counseling is provided to everyone that needs help, FHA lenders and HUD counselors were given certain responsibilities to accomplish. Lenders approved by the FHA will be instructed to give home inspection information at first contact to help prospective home buyers think about home inspection early in the house buying process.
HUD-certified counselors will receive training in providing advice on home inspection and on choosing home inspectors. They will also be instructed to provide home inspection brochures to prospective home buyers.
