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HUD's Homebuyer Protection Plan: Consumer ProfileFrank and Shannon Sinigaglio, Penns Grove, NJ
In July 1996, Frank Sinigaglio and his wife, Shannon, bought what they considered to be their dream house. The house, which cost $85,000, offered enough space for the Sinigaglios and their three daughters, and Mr. Sinigaglio was comfortable with the deal because he was confident that purchasing the house with an FHA-backed loan meant that he would have fewer problems.
Shortly after moving into the house, however, Mr. Sinigaglio discovered that the house had major structural defects he didn't know about because the appraiser who conducted the physical review of the house had not listed them on the required valuation condition sheet or informed him of the problems. A later inspection made after the purchase of the home determined that the house the Sinigaglios paid $85,000 to buy was really worth only about $65,000.
Problems included seven screwjacks that were improperly secured to the basement floor; a support beam that had a 30-inch long notch cut out of it and had sustained termite damage; a roof that needed to be replaced; cracks in the front sidewalk; wiring in the basement that was improperly spliced; and a sewage exhaust pipe that was releasing sewer gases into the second floor bathroom . Other problems included a shower that drained poorly; concrete blocks that were held together by separated mortar; and a laundry room that had a support beam not adequately secured to the floor.
According to Mr. Sinigaglio, however, there wasn't any mention of the repairs that needed to be made to the house during settlement, nor was there any form in the settlement papers that reflected the actual physical condition of the house or its defects.
Since moving into the house, Mr. Sinigaglio has not had the money to make the necessary repairs. In fall 1997, he applied for a 203K home repair loan, but was turned down because the repairs would have cost more than the value of the house. Both a New Jersey state certified inspector and an FHA review appraiser who looked at the house when Mr. Sinigaglio applied for the 203K loan said that the initial appraised value of the house was too high.
The appraiser who conducted the physical review of Mr. Sinigaglio's house has been banned from doing FHA appraisals for a period of six months, beginning April 16, 1998.
Content Archived: January 20, 2009