Appraiser Marked Private Septic And Well As Public

[sputnam]

Okay... so, let's be rational for a moment. Either the appraiser made an error in the report or, the appraiser intentionally misreported. The property is what it is. You made and offer and signed the contract to purchase and applied for financing BEFORE the appraiser was called by the Lender. Why didn't the Realtor (if there was one) inform you of the issue? Why didn't the Home Inspector (if you bothered to get one) inform you of the issue? Why didn't YOU do your own research and discover the issue BEFORE you signed the purchase agreement?

The appraiser's job and expertise is in forming a supported opinion of value. Appraisers are not engineers or home inspectors... as FHA will tell you. If you can find the time to read the notice to borrowers... you will find that there is no claim in an appraisal report that the subject property is free of defects. That determination is beyond the Scope of Work and outside the expertise of most appraisers. Given that the appraiser's job is value... do you know of any data that indicates any difference in value between a dwelling with public utilities and one with a well and septic system?

 

[Grind]

Seller disclosure? I am in NC, required by all sellers even when not listed. It should be part of the contract, great source of information. Was it filled out by seller, was it supplied by lender? I have asked for seller disclosure from lender. Another direction, is public water and sewer at the site of the subject? Did you check for water meter. A phone call to utilities dept. could have confirmed water and sewer hook up. My thoughts, again in NC.

 

[Huds_Harm]

You still would have had to repair the well had it been 50' out. How did the lender get wind of the well failure? And if FHA did not know about the well, then it's not FHA that made you move it.

Not until October 23rd when I realized it was marked public and now a few days ago learned the AMC told the lender it was marked private and meets all MPR.

 

[Huds_Harm]

Okay... so, let's be rational for a moment. Either the appraiser made an error in the report or, the appraiser intentionally misreported. The property is what it is. You made and offer and signed the contract to purchase and applied for financing BEFORE the appraiser was called by the Lender. Why didn't the Realtor (if there was one) inform you of the issue? Why didn't the Home Inspector (if you bothered to get one) inform you of the issue? Why didn't YOU do your own research and discover the issue BEFORE you signed the purchase agreement?

The appraiser's job and expertise is in forming a supported opinion of value. Appraisers are not engineers or home inspectors... as FHA will tell you. If you can find the time to read the notice to borrowers... you will find that there is no claim in an appraisal report that the subject property is free of defects. That determination is beyond the Scope of Work and outside the expertise of most appraisers. Given that the appraiser's job is value... do you know of any data that indicates any difference in value between a dwelling with public utilities and one with a well and septic system?

Lets be logical then, whether mistake or intentional whether the system was broken or failed after purchase, be it not for the appraiser marking it public and the AMC telling the lender it was marked private and meets all FHA requirements I would not have a $60,000 bill.

 

[Huds_Harm]

Seller disclosure? I am in NC, required by all sellers even when not listed. It should be part of the contract, great source of information. Was it filled out by seller, was it supplied by lender? I have asked for seller disclosure from lender. Another direction, is public water and sewer at the site of the subject? Did you check for water meter. A phone call to utilities dept. could have confirmed water and sewer hook up. My thoughts, again in NC.

There was a seller disclosure stating it was septic as well.

 

[Huds_Harm]

You still would have had to repair the well had it been 50' out. How did the lender get wind of the well failure? And if FHA did not know about the well, then it's not FHA that made you move it.

No I would not have to repair it if it were 50' out because the loan would not have funded due to it being 40' and I would not be in this home unless the seller brought it up to MPR.

 

[Huds_Harm]

Great Article

PUBLISHED JANUARY 27, 2021

Open Letter to Mortgage Lenders​

• Are you aware most appraisal management companies do not value the education and experience of the appraiser? The appraiser that was licensed last week is seen equal to an appraiser with 40 years’ experience.
• Are you aware most appraisal management companies violate Fannie Mae guidelines on a day to day basis in regards to Collateral Underwriter results?
• Are you aware some appraisal management companies employ individuals to review appraisals that are not properly educated or licensed to do so?

The GSE’s have given lenders their assurance if an appraisal meets a certain score in Collateral Underwriter the lender has no liability for the appraisal. This could not be further from the truth.

Fannie and Freddie may not hold you liable however, there is nothing stopping an investor of the mortgage backed security from legal action against the lender. There is nothing stopping a borrower, Realtor, or seller from legal action against the lender, and there certainly is not any guarantee an appraiser will not seek legal action against a lender. What about E&O insurance companies? They too could file a legal action against the lender due to the actions of the appraisal management company.

Regardless of who pays the appraisal management company, what does the appraisal management company actually do to earn their fee? Their title states appraisal management company. One would tend to believe they actually manage something. But they do not manage anything about the appraisal itself. In fact, most appraisal management companies force the appraiser to sign an indemnity agreement releasing them of all liability, completely ignoring the fact each appraisal management company has their own instructions on how to complete the appraisal. Heck, some even want to make the appointment for the appraiser. How can someone who is supposed to manage the appraisal be released of all liability? Where does that leave the liability? Directly on the lender!

The market has been crazy and everyone is extremely busy. But what is going to happen, not if, but when the market turns? The foreclosure moratorium will end at some point. Then what? Forbearances will end. Then what? The lender who signed off on the entire loan package, including the appraisal will be on the hook for any and all legal claims. The appraisal management company the lender hired approved the appraiser and signed off on the appraisal. The legal action from all parties is pointed directly to the lender, after all the lender approved and funded the loan!

By Advocate. The author is a Certified Residential Appraiser and has chosen to use the pen name Advocate to protect their identity

Open Letter to Mortgage Lenders - Your Appraisal Management Company

How much vetting have you done on the appraisal management company? How involved are you as the lender in the day to day activities of the appraisal

appraisersblogs.com

 

[EddieB]

What’s a AMC?

 

[residentialguy]

No I would not have to repair it if it were 50' out because the loan would not have funded due to it being 40' and I would not be in this home unless the seller brought it up to MPR.

You had a faulty well. You would have gotten it fix what regardless of what distance it was from the house.

 

[Huds_Harm]

You had a faulty well. You would have gotten it fix what regardless of what distance it was from the house.

You are wrong. The seller had a well and septic that did not meet MPR. Had the appraiser not made the mistake I would not be fixing anything as the loan would not have funded.

FHA well and septic inspection requirements

Well Requirements
For an FHA appraiser to pass your well, it must be at least 50 feet from your septic tank and at least 100 feet from the septic tank's drain field. In addition, the well cannot be within 10 feet of your property line. The appraiser can also test for chlorination in the water.

When the Onsite Sewage Disposal System is not sufficient and an off-site system is not available, the Mortgagee must reject the Property unless the Onsite Sewage Disposal System is repaired or replaced and complies with local health department standards.