August     2005
Washington Watch
Inspection News and Views from the American Society of Home Inspectors


ASHI Builds Relationship with HUD and VA

RANDALL PENCE

Part Two of a two-part account.   

On May 11, an ASHI delegation comprised of Rob Paterkiewicz, Don Norman and Joe Corsetto joined ASHI’s lobbyist, Randall Pence of Capitol Hill Advocates, for a rapid-fire series of meetings on Capitol Hill, at HUD and the Veterans Administration.

The purpose of the meetings was to continue ASHI’s dialogue with Congress and the administration to promote the expanded use of voluntary home inspections, and to explore a multitude of ways in which the federal government can make that happen.  

ASHI is capitalizing on the 2004 GAO report on home inspections that it requested. The report affirmed that homebuyers who use home inspections find them valuable. But it also proved there is vast misunderstanding that is causing many homebuyers to not seek home inspections.  

The ASHI delegation met with principals and staff of Sen. Kit Bond (R-MO), Sen. John Corzine (D-NJ), Sen. Jim Talent (R-MO), Sen. Barack Obama (D-IL), Cong. Nydia Velazquez (D-NY), the Department of Housing and Urban Affairs and the Veterans Administration.

Here are some of the highlights from ASHI’s meeting with federal agencies:
In the afternoon, ASHI shifted its focus from the legislative branch to the executive branch, specifically two key federal agencies that administer home loan programs: HUD and the Veterans Administration.  

HUD: ASHI has actively cultivated a good working relationship with the staff at HUD in charge of FHA housing programs. The relationship has proven fruitful, with HUD staff listening to ASHI’s concerns about the HUD documents that communicate home inspection information to the huge FHA homebuyer market. It is also well known that HUD documents heavily influence non-FHA transactions, too.

ASHI would like to recognize the good efforts of the HUD staff in redrafting these core documents to more prominently highlight the benefits of home inspection, requiring homebuyers to make serious home inspection decisions (and certify to that fact in writing). Especially when contrasted with the ill-fated “Your Home—It’s a Nightmare” public service announcements of the late 1990s, HUD has made great strides in improving its home inspection messages.  ASHI is appreciative of HUD’s responsiveness to the profession’s issues and thanks the HUD staff for
listening—and taking action.

ASHI believes that work remains to be done, both in fixing other documents that exacerbate confusion between appraisals and home inspections, and in delivering the improved messages to the public. Certain documents retain too much of a “checklist” appearance, which gives the impression that some manner of home inspection has already been performed. HUD staff agree that there appears to be evidence of substantial confusion, including the 2004 GAO study of home inspections, which discovered a dramatic variance between buyers who thought they had a home inspection compared to those who actually know what a home inspection is. Considering that HUD documents influence millions of homebuyers, even small problems may loom large over the entire homebuying market. And the problems identified by ASHI are not small. Much of the discussion dealt with these “checklist” issues. We believe further action to distinguish appraisals and home inspections will be under active consideration. Again, ASHI thanks HUD staff for their openness to address these issues.

ASHI expressed its concerns that affinity programs commonly referred to as “pay for play”—paid referrals arrangements—create problems with regard to professional independence. HUD staff indicated that HUD was under pressure to change its policy to allow pay for play. ASHI is considering HUD’s comments in hopes of retaining the prohibition on pay for play. ASHI has been granted  a follow-up meeting to ascertain HUD’s plans regarding enforcement of the current RESPA prohibition on “pay for play” programs.

RESPA reform remains a strong possibility later this year. While the HUD staff could not comment with any specificity that is quotable in this piece, ASHI membership should expect that some proposal will be made during the second term of President Bush. ASHI did make the request that it be included in stakeholders meetings leading up to a new proposed rule. HUDhas recently announced it will host a series of listening sessions around the country to seek small business input for a new RESPA rule. ASHI plans to offer comments through Members located near the listening sessions.

Veterans Administration: ASHI met with VA staff. The purpose of this meeting was to establish a rapport and lay the foundation for a dialogue. ASHI hopes to duplicate its success working with HUD in the VA home loan arena.

VA staff made clear that they face a major problem of misperception. A large portion of VA homebuyers believe that the VA automatically conducts mandatory home inspections, which is clearly not the case. The VA feels a strong need to correct this mistaken notion and was receptive to some manner of cooperation with ASHI to achieve this goal. ASHI will be working with VA staff to develop new and better educational materials to urge voluntary home inspections and ensure that homebuyers understand what is at stake when making their decisions. It is also important that the messages be delivered in ways most likely to reach homebuyers broadly and quickly, in digital formats and on the Internet.

ASHI was very pleased with the introductory meeting and looks forward to a more specific planning lunch with VA staff in the near future.  

Both HUD and the VA have enormous resources to communicate and mandate communication on home inspections. Clearly, these federal agencies have the authority and resources to speak to a very large portion of the nation’s homebuyers, and they do so without the imprimatur of industry bias. ASHI will continue to seek valuable operating alliances with the federal agencies and ensure that the home inspection message being delivered to homebuyers is better, more accurate, more specific, and delivered with greater impact.