Mortgage Loan Inspections

Mortgage Loan Inspections

Is a Mortgage Loan Inspection (MLI) a survey? No, it isn't. But when you ask a property owner if they have a survey of their property, quite often they will say yes and produce a MLI plan. Any that I have been shown state on the plan, as required, that it is not a boundary survey. Unfortunately many people don't read the disclaimers on the plan or don't understand the difference between a boundary survey and a MLI.

The Administrative rules governing surveyors for both Maine and New Hampshire establish that the purpose of the MLI is to provide information that the mortgagee or title insurer may use to determine the insurability of the real estate and improvements thereon. In this situation the client will not be the buyer or owner of the property. In accordance with the rules, disclaimers are added stating that no monuments were set and that any plan produced is NOT a boundary survey. The task of preparing MLI's was placed with the licensed land surveyor.

The MLI product issued to the bank/attorney/title insurer is different in each state. The product delivered in Maine is a sketch, signed and sealed by a surveyor, of the property which shows:

a. the buildings and improvements
b. possible encroachments
c. flood hazard zone
d. zoning requirements

The title source (deed) and location of the property are also referenced. The MLI plan is prepared after a site visit to the property and is based on measurements taken at the site. The plan must state that it is NOT a boundary survey. The plan is signed and sealed by the surveyor.

The product delivered in New Hampshire is a report, not a drawing, which describes what was found at the property after a site inspection. The New Hampshire rules do not require comment on the flood hazard zone and zoning requirements, though most clients want information on these items. The report is the document which is signed and sealed by the surveyor. The rules do allow a sketch, drawn on a separate piece of paper, to be provided to the client. The sketch CANNOT be signed or sealed. The theory is that the sketch will not be construed by the land owner as a survey since it is neither signed nor sealed.

We would be happy to discuss your MLI or other survey needs with you. If you would like to know more about how we can help you, please contact us .

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ROARING BROOK CONSULTANTS, INC.

15 Sewall Road ●South Berwick, ME 03908

325 Clematis Street, Suite 175 ● West Palm Beach, FL 33401

Toll Free 877-722-2643 ● Fax 207-384-5383