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Congressman Requests Examination into Mandatory Home Inspections;
GAO to Conduct Landmark Study

In a landmark development for home inspection advocates, a senior Member of the U.S. House of Representatives has formally requested a General Accounting Office (GAO) study to quantify the costs and benefits of mandatory home inspections in federal home loan programs.

Cong. Douglas Bereuter (R-NE), a key Member of the Financial Services Committee and the Subcommittee on Housing, issued the request in an August letter to Comptroller General David Walker.

The GAO study reflects growing concerns about the inherent vulnerability of homebuyers and the lack of effective federal policies that alleviate those concerns by using independent professional home inspectors. "The American Society of Home Inspectors (ASHI) has been urging policy makers in Washington D.C. to examine the risks that uninformed home buying decisions pose for consumers and federal home loan programs," said Rob Paterkiewicz, Executive Director of ASHI, the largest and most respected non-profit professional organization for home inspectors. "Mandatory home inspections would be beneficial for homebuyer protection as well as prevention against fraudulent acts such as property flipping. We applaud a focused study carrying the prestige of GAO."

"Some in Congress have become increasingly troubled that FHA programs are devoid of requirements that inform homebuyers of the technical details of their purchases. This represents a significant hole in America's consumer protection safety net," continued Paterkiewicz.

Role of Study

In anticipation of possible policy debates on this problem, Cong. Bereuter's request seeks information never before obtained to help Congress make better informed policy judgments on initiatives that encourage greater use of home inspections. Cong. Bereuter identifies several key areas for investigation, including:

  • The extent to which increased use of independent home inspections could protect the financial interests of consumers; the extent to which the cost of home inspections would influence home buying decisions; and how cost issues could be mitigated through FHA financing changes.

  • The extent to which mandatory home inspections could protect consumers in vulnerable populations such as the elderly, parents with young children, under-educated individuals, economically disadvantaged individuals, and the disabled.

  • The extent to which the lack of home inspections place taxpayer-funded loan programs at increased financial risk.

  • The extent of consumers' knowledge about FHA-financed independent inspections available under HUD's existing Home Buyer Protection Plan, and whether the existing program sufficiently educates consumers about the differences between appraisals and inspections.

  • The extent to which home buyers' choices for an inspection are affected by economic forces.

  • The extent to which there is a correlation between foreclosed FHA properties and home inspections conducted prior to closing.

For More Information

Contact:

Sheena Quinn
Public Communications, Inc.
squinn@pcipr.com
312-558-1770

Homebuyers who wish to know more about the American Society of Home Inspectors or obtain the names of ASHI members near them may contact the organization at 932 Lee St., Suite 101, Des Plaines, IL 60016. Phone: 800-743-2744. Or visit the ASHI Web site at www.ashi.org.