At ASHI’s recommendation, Congress recently introduced legislation that would greatly enhance and intensify the quality of HUD housing counseling programs regarding home inspections for prospective homebuyers.
HR4776 is the Consumer Protection Home Inspection Counseling Act. It would establish a comprehensive program to train housing counselors who provide counseling under HUD programs to also provide specific counseling to consumers on voluntary home inspection.
The training program would include development of a training module to train counselors, as well as counseling aids written in plain language and suitable for distribution to consumers.
The bill would require HUD program counselors to be trained to know and to inform the consumers they counsel key home inspection facts, including the
- A home inspection in connection with purchase of a home is voluntary, not mandatory.
- HUD recommends that homebuyers obtain a voluntary home inspection.
- A home inspection is not required to obtain an FHA loan, and FHA does not perform home inspections.
- In most cases, no home inspection will be performed unless the homebuyer requests one.
- It is the burden of the homebuyer to arrange for a home inspection if one is requested.
- An appraisal is not equivalent to a home inspection.
Several of these issues are serious points of confusion among homebuyers, as documented by a GAO study that was conducted for Congress at ASHI’s request. The study showed that such confusion makes it easy for prospective homebuyers to pass on their opportunity to obtain a voluntary home inspection.
HR4776 would further require HUD to certify that HUD counselors have received the training, that HUD adopt a public outreach program to disseminate the training materials to the general public, and require HUD to report to Congress on its progress in implementing the Act.
The Consumer Protection Home Inspection Counseling Act was drafted in close consultation with ASHI in its latest effort to infuse voluntary home inspection in U.S. housing policy as a highly recommended means to help homebuyers make intelligent home purchases.
The bill is designed to increase the number of homebuyers fully enabled to make the critical decision to obtain a home inspection.
The clear impact of HR4776 would be to intensify the home inspection message to prospective homebuyers and to have this message delivered by an unbiased, authoritative party — the U.S. government.
The introduction of HR4776 comes as Congress is considering several major bills to address the perceived excesses leading to the subprime mortgage problem and the ensuing downturn in the home sales industry.
One of the recurrent problems identified in congressional hearings during 2007 is that many homebuyers who are presently in mortgage distress did not understand the full ramifications of their purchases.
In response, there is an emerging theme in congressional legislation militating for better knowledge — better homebuying awareness — among prospective homebuyers. For example, Congress is considering clearer, simpler and more effective mortgage disclosure documents, 444 more like HUD’s very transparent “For Your Protection – Get a Home Inspection” document. ASHI has worked diligently with HUD to make the home inspection disclosure document unavoidably simple and easy to understand.
HR4776 would require HUD housing counselors to be fully trained to use the “For Your Protection – Get a Home Inspection” document and make sure that the people they counsel see it and use it.
At the heart of the issue is a theme of consumer protection for homebuyers that has growing bipartisan, substantive appeal on both sides of Capitol Hill.
ASHI’s constant message to policy-makers is that consumer protection and voluntary home inspections fit like hand and glove. Any remedial legislation that seeks to assist homebuyers as consumers of goods and services in commerce should encourage homebuyers to make the critical decision to obtain voluntary home inspections.
HR4776 would help cast voluntary home inspection counseling as one of many means to avoid similar problems in the future by helping educate homebuyers.
ASHI applauds the introduction of the bill and will be pushing for broad congressional support and consideration in the current session of Congress. ASHI will be encouraging its members to contact their members of Congress to cosponsor the legislation.