 |
||||||||
 |
||||||||
|
||||||||
|
Sinkhole in past foils homebuyer
By JENNIFER LIBERTO SPRING HILL -- L'Tanya Morris wanted to raise her daughter in year-round sunshine. The 41-year-old fell in love with a three-bedroom house at 4096 Everett Ave. with a screened porch, back yard and garage listed for $86,000. So she packed up her daughter and her LaSalle, Ill., life in July and headed south. The house had its own history, she was warned. A sinkhole had once lurked beneath. But the hole had been repaired, and the house was approved by an engineer and deemed insurable. Engineers, real estate agents and mortgage lenders assured her that all was in order. The federal government, however, denied Morris a Federal Housing Administration loan last month. There were no problems with her credit, income or insurance. But the house -- or more precisely, the sinkhole -- though repaired, was too risky in the government's eyes. "It's absurd," said Morris, a registered nurse who is now renting and house-hunting between work and carting her daughter to and from school. "The house should be just like any other house -- or safer, since we know what's underneath has been fixed, unlike all the other houses in Spring Hill." Potentially, thousands of houses that have had sinkholes in Hernando and Pasco counties are not eligible for FHA-insured mortgage loans, which are geared to help first-time buyers or those who lack credit history or the cash for the larger down payment needed for a conventional loan. Several engineers, mortgage lenders and real estate agents who work in the local housing market said they had not known about the FHA's no-sinkhole policy. The common assumption, they said, is that once a sinkhole is repaired with engineer-approved documentation, the structure is considered safe and sound, and the house is eligible for insurance and financing. Not so, says U.S. Department of Housing and Urban Development spokesman Jerry Brown, who points to a longstanding federal policy of refusing to insure mortgages on houses that have shown the slightest trace of sinkhole activity. While the HUD policy doesn't address sinkholes specifically, it states: "The property must be free of hazards that may adversely affect the health and safety of the occupants or the structural soundness of the improvements." "We're not sure it would be wise to invest taxpayer dollars in a property that has had a sinkhole on it, since there's a chance it would have another sinkhole on it," Brown said. "The government has to limit its liabilities." However, experts throughout the county say the chance of a repaired house falling prey to another sinkhole is minimal. Several said they had never seen a sinkhole reopen beneath a house after it had been repaired. "The chances a sinkhole would reopen are very, very slim," said Tony Gilboy, a geologist at the Southwest Florida Water Management District who was befuddled by the FHA policy. "A lot of work goes into fixing and plugging these cavities, and to go and say they're a hazard would be negating all that work." Both real estate agents and engineers said they feared that the FHA's policy would fan further fears about Spring Hill's housing market. Already, insurance companies are refusing to provide homeowners new insurance policies for houses near existing sinkholes. Other insurance companies have increased insurance premiums on houses in the area, citing potential sinkhole problems. "There are a lot of uneducated people out there when it comes to sinkholes, and the federal government is not excluded from that group," said Art Dillman, the owner of All Coast Engineering, which investigates and repairs sinkholes. Abdol Chini, a University of Florida engineering professor, said the FHA policy pits engineering against psychology. "If you have replaced a foundation that might not be hard with something hard like grout and concrete, I would trust the safety of the property and the professional engineer who puts his signature and stamp on that," said Chini, who works at the M.E. Rinker Sr. School of Building Construction at UF. But he said that most people, himself included, would prefer to invest money in a house that had never had a sinkhole. One of the few people who knew about the FHA's exclusion of houses with a history of sinkholes was Randy Bluhm, who had purchased the Everett Avenue house for $20,000 in March. He oversaw the repairs, then listed the house at a price $7,000 more than the previous owners had bought it for in 1992 in presinkhole condition. He said the FHA had denied a mortgage on one of his houses once before, so he knew about the policy. What's a house hunter caught in such a situation to do? Consider one of the thousands of available conventional loans, which require a down payment of at least 20 percent of the house's purchase price as well as good credit history and a steady income, said Carmen Niedbala, a senior loan officer at Pinnacle Financial Corp. in Spring Hill. "As long as the customer can obtain a structural engineer's report and can get insurance, they're going to be fine in terms of conventional loans," Niedbala said. Mortgage representatives at Brandon Mortgage Co. in Inverness, SunTrust Bank in Brooksville, America One Mortgage in Spring Hill and Chase Manhattan in Spring Hill said they could see no reason to deny a loan for an insurable house with a repaired sinkhole. "As long as the house is insurable, we wouldn't care," said Elaine Henwood, a mortgage originator with Chase Manhattan. Anyone wanting to borrow more than 80 percent of the house's value might consider private mortgage insurance, an expensive monthly policy that allows for a smaller down payment. Those policies can cost between $20 and $100 a month, paid to a mortgage insurance company that would cover the loan in case of default. After the borrower pays off 22 percent of the house's value, the PMI policy must be terminated, according to a 1998 law. PMI Group Inc. of Walnut Creek, Calif., does not exclude sinkhole-repaired properties, company spokesman Matt Nichols said. -- Jennifer Liberto covers business and development in Hernando County and can be reached at 848-1434. Send e-mail to liberto@sptimes.com.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
|
