FHA Septic & Well Appraiser Lawsuit

[Huds_Harm]

If FHA/HUD did not insure the loan and pushed it back on the Lender - are they still charging you for monthly
FHA ( MIP ) Mortgage Insurance- in your tax -insurance impound account ?

They insured the loan. They told the lender “there was no way they could have known” the appraiser marked it wrong.

 

[Huds_Harm]

So, how much are your 'damages' ? Is the appraiser using his E/O company? What is the cost to cure the septic and well situation. Does the seller and realtor have any liability in the whole situation. I remember being told in a RE Class by the attorney instructor that when there is a problem that affects a buyer, he would sue everybody (really, everybody), and then let them figure out who was at fault.

Cost to cure is over $100,000. Seller and realtor listed it correctly. E and O is involved and damages are still accruing.

 

[Elliott]

Cost to cure is over $100,000. Seller and realtor listed it correctly. E and O is involved and damages are still accruing.

So if the seller and realtor listed it correctly and you relied on their representations and you bought it knowing it was on septic and well, then why would the responsibility for your issues be with the appraisal? The appraisal was not a property inspection report, it was requested by a lender/AMC as a mortgage requirement.

 

[Huds_Harm]

So if the seller and realtor listed it correctly and you relied on their representations and you bought it knowing it was on septic and well, then why would the responsibility for your issues be with the appraisal? The appraisal was not a property inspection report, it was requested by a lender/AMC as a mortgage requirement.

An FHA appraisal ensures the property meets FHA minimum property requirements and the home does not.

 

[Tom D]

long ago you could not sue for damages because the appraisal was for FHA only. that changed a while back. so not paying your mortgage payment is probable ruining your credit for your next purchase. gonna be hard to win and have a bad fico score. i'm not sure about a jury verdict, not checking a box doesn't mean he forgot, or was, doing a home inspection. being big city appraiser, i don't understand a buyer not verifying those systems are properly working. so is your case on a bad system, or the home not meeting FHA minimum standards. attorneys winning on this one with what it will cost you.

 

[Huds_Harm]

long ago you could not sue for damages because the appraisal was for FHA only. that changed a while back. so not paying your mortgage payment is probable ruining your credit for your next purchase. gonna be hard to win and have a bad fico score. i'm not sure about a jury verdict, not checking a box doesn't mean he forgot, or was, doing a home inspection. being big city appraiser, i don't understand a buyer not verifying those systems are properly working. so is your case on a bad system, or the home not meeting FHA minimum standards. attorneys winning on this one with what it will cost you.

She did not “forget” she went against what it was listed as to bypass all minimum property requirements that would have prevented the loan from funding. Damages to my FICO score will be included. Once the required field review is ordered to determine property eligibility the bank is required to mitigate.

A) Findings
A Finding is a final determination of defect by the mortgagee.
(B) Materiality
In the context of mortgage origination and underwriting, a Finding is Material if disclosure of the Finding would have altered the mortgagee’s decision to approve the mortgage or to endorse or seek endorsement from FHA for insurance of the mortgage.
In the context of mortgage servicing, a Finding is Material if it has a financial impact on the property, the Borrower, and/or FHA.
(C) Mitigated or Resolved
A Finding has been Mitigated or Resolved if the mortgagee has adequately addressed the deficiencies underlying the Finding, and such deficiencies have been remedied so that the mortgage presents an acceptable level of risk to the mortgagee and to FHA.

 

[Overimprovement]

So my summary attempt:

• Everyone, including yourself, KNEW the home had well and septic prior to closing.
• There were two agents involved. Neither one apparently advised you to get a well/septic inspection. (But even if you had, it would have passed, because...)
• Everything was functional the day the loan closed.
• Subsequently, there was a failure, and the TL-DR result is a repair cost that could approach $100K.
• Obviously miffed, you are looking for ANY way out of this financial situation you are now in.
• Two years later, you still have no solution, and so you re-open a lengthy discussion here, the true purpose of which remains unknown, but I assume it is to get other appraisers to agree with you that this was somehow appraiser error and they should be held responsible--maybe you are screenshotting the whole thread to show to the judge?

As an outside observer, I will state that the two most culpable parties involved are you, and your real estate agent. Anyone concerned that a home has well/septic should ALWAYS get an inspection, but even then I am not sure that checks on physical placement, only on function. If some part of the system was already NOT up to code, that should have been noted somewhere, perhaps a title search should/could have uncovered that?

Questions:
How did this well/septic ever get approved originally if it was outside of local code requirements?
If the codes changed, should it not be grandfathered in?
Perhaps you did answer, but do you have clean water and a functional septic system today?

 

[BRCJR]

I did not read every post---but-

What did the purchaser think they were buying at time of contractual agreement? Whose fault would it be if they offered without knowing what they were "bidding" on?

How much value difference is there between a comparable sale and the subject with the only significant difference being those particular public utilities vs on-site?

 

[Huds_Harm]

I did not read every post---but-

What did the purchaser think they were buying at time of contractual agreement? Whose fault would it be if they offered without knowing what they were "bidding" on?

How much value difference is there between a comparable sale and the subject with the only significant difference being those particular public utilities vs on-site?

The purchaser thought they were buying a home that met all FHA minimum property requirements as was fraudulently stated on the FHA appraisal.

 

[Huds_Harm]

So my summary attempt:

• Everyone, including yourself, KNEW the home had well and septic prior to closing.
• There were two agents involved. Neither one apparently advised you to get a well/septic inspection. (But even if you had, it would have passed, because...)
• Everything was functional the day the loan closed.
• Subsequently, there was a failure, and the TL-DR result is a repair cost that could approach $100K.
• Obviously miffed, you are looking for ANY way out of this financial situation you are now in.
• Two years later, you still have no solution, and so you re-open a lengthy discussion here, the true purpose of which remains unknown, but I assume it is to get other appraisers to agree with you that this was somehow appraiser error and they should be held responsible--maybe you are screenshotting the whole thread to show to the judge?

As an outside observer, I will state that the two most culpable parties involved are you, and your real estate agent. Anyone concerned that a home has well/septic should ALWAYS get an inspection, but even then I am not sure that checks on physical placement, only on function. If some part of the system was already NOT up to code, that should have been noted somewhere, perhaps a title search should/could have uncovered that?

Questions:
How did this well/septic ever get approved originally if it was outside of local code requirements?
If the codes changed, should it not be grandfathered in?
Perhaps you did answer, but do you have clean water and a functional septic system today?

This update is for those of you who defend this type of appraiser