Surveyor, Jim Nadeau shared the following information for Mortgage Loan Inspections vs. Surveys:
Mortgage loan inspection vs. survey – by Nadeau Land Surveys
The intention of a mortgage loan inspection product is to evaluate building setback compliance at the time of construction and if National Flood Insurance Program mandatory flood insurance is required. These two items, and only these two items, are satisfied in a mortgage loan inspection. In the simplest of terms, the mortgage note creates an investment and the mortgage loan inspection aids in determining risk for the investor. It does not establish or identify boundary lines.
What makes a boundary survey different? A boundary survey does not rely upon the current deed in the locus chain of title, but actually uses the first deed from the original grantor regardless of how distant in the past this operative deed rests. Additionally, the operative deeds of all applicable neighboring chains of title are analyzed to determine the sequential or simultaneous order of lot or line creation. It is the best method to properly render a strong professional opinion as to the location of a record boundary line. In addition, boundary surveys also identify rights of way and easement locations, on-site encroachments, an accurate area, differences in record and occupation lines, and of course, an accurate location of a boundary line defendable in a boundary dispute.
A mortgage loan inspection on the other hand often assumes the field evidence found is correct, uses the description on the current or proposed deed, does not evaluate neighbors’ deeds, and assumes no typographical errors exist in the deed description.
In summary, a mortgage loan inspection is an investment tool and though paid for at closing by the applicant, it is not intended to be used by a homeowner, an architect, Realtor, engineer, or municipality for planning, design, permitting, or construction purposes. The location of a record boundary line cannot be determined without formal records research, in-depth field reconnaissance and location, and mathematical computation. Take time to read the many qualifications often present on the face of a mortgage loan inspection as it is a product extremely deficient of the efforts required for a boundary survey. I do support the mortgage loan inspection as a professional product, but only when properly used, which is never for boundary line determination, land divisions, or municipal approvals.