Lake City Servicing FAQs

No, that is only a tool to give you an idea of what the rehab cost could look like. We need an actual 3rd party licensed and bonded contractors bid to get the loan started.

Licensed and bonded contractors give you the insurance should any damage happen during the renovation or construction, you are assured that your contractor will take the responsibility for it. And that responsibility is not just for damage to your house, but also for any injury that might occur during construction. They need to have general liability insurance and workers compensation insurance

General liability insurance protects the homeowner against damages such as the contractor collapsing your sewer line or flooding in your basement due to a bad plumbing fix or scratching up your beautiful hardwood floors with their heavy equipment.

Workers compensation insurance protects any employee injured on the job by that insurance.  However, if the company is not insured, you, the homeowner, could be open to being sued by the injured employee. 

A surety bond is all about a company’s reputation to follow through. A surety bond is a promise and a guarantee that they will complete the work they agreed to do. It’s a promise that they will follow the rules and regulations of their particular trade. If a company fails to meet their obligations, the customer can make a claim against the bond.

Ask them to provide proof for each of the 3 items make copies and confirm they are current and up to date. 

It’s a bid that is broken down into categories. But make sure you don’t just say paint. Is paint interior or exterior? Is Plumbing finished or rough? Cabinets don’t include counter tops so make sure you split those items up. Don’t be so general by saying bedrooms, bathrooms, kitchen. I need those things broken down by flooring, lights, closets, tubs, toilets, sinks, etc. Do not do it by room do it by category. Use the cost breakdown sheet to make things easier on you. Look under FORMS.   

• The bid follows the loan from start to finish.
• The appraiser bases the valuation on that initial bid and so those items are expected to be completed. When you deviate from that initial bid it messes with the AR value that the appraiser initial gave.
• The loan officer based the loan on that initial bid.
• That bid is used to do the cost breakdown for the draws.

• Company letter head
• Contractors Business Name
• Contractor or General Contractor Name
• Address of Contractors business 
• Phone Number of Contractor
• Email address of the contractor or company
• If you change contractors, we need the above information sent to us ASAP. 
• Must include Clients Name
• Must include Clients Property Address where the work will be done.
• Must include the words bid or estimate and Labor and Materials
• Must have a detailed explanation per category item of the scope of work. It must include the total cost of that line item next to it for the entire project. (Itemize by category not by room or piece)
• Terms of the contract – What is required upfront to get project started – per draw – final payment. Any milestones, reports, deliverables, and end products that are expected to be provided by the performing party.
• Must be signed by the contractor

That’s a very fine line. The appraiser based the evaluation on that initial bid. Those are the items that are expected to be completed. The bid could be changed within the dollar amount but the line item itself cannot be changed. Therefore, we do not allow work order changes.

Yes, any seasoned contractor knows there are always incidentals. If they have not put in a contingency, all overages on rehab will need to come out of client’s own pocket.

We do not do change orders. Unexpected repairs will need to come out of the client’s own pocket or contractor’s contingency. If Cogo holds a contingency and the contractors needs to use that, the contractor needs to write a statement to the lender as to why they need to access those funds. It will be up to the lender to say yes or no of releasing those funds. 

We do not do change orders!

You and your contractor need to think about the unexpected cost that always comes up in renovating that might happen. Make sure to have a contractors contingence set aside for those unexpected cost and do not count on change orders.  

Reasons for change orders

• Haste or inadequate planning in preparing the initial contract.
• A poorly defined scope of work.
• Compressed project schedules.
• Unrealistic cost constraints.
• Time and material changes; and
• Owner-directed acceleration.

In my experience, contractors just want the bid, so they don’t put in that contractor’s contingence which in turn, hurts our clients in the long run. So, if you are getting multiple bids and a bid is higher because of a contingency, I would go with that contractor because they know the reality of rehab.