FHA Septic & Well Appraiser Lawsuit

[BRCJR]

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

What led them to believe such? Did they made a buying decision before the appraisal was conducted?

Did someone or some entity mislead them when presenting the property for sale?

 

[Huds_Harm]

What led them to believe such? Did they made a buying decision before the appraisal was conducted?

Did someone or some entity mislead them when presenting the property for sale?

A buying decision cannot be made prior to the FHA appraisal ensuring the home meets all FHA minimum property requirements.

The appraiser mislead the lender by concealing the fact the property was on septic and well, or second scenario, I have found evidence this lender "forcefully" tells appraisers to remove any qualifying criteria that would require further inspection in order for the loan to close.

 

[Dublin ohio]

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

Although the above is true. The appraisal is for FHA to decide whether or not the property qualifies for FHA insured financing. Granted the condition of the property is a factor in that decision. But none the less. FHA still does not guarantee the condition of the property. Regardless of what the appraisal says. It is obvious that the appraiser screwed the pooch. None of us know why. I see no way you could hold FHA responsible. It is probably also going to be very difficult to hold the lender responsible. Even if they didn't do all of their due dillegence. Because the end result would have been you just not getting the loan. Did you receive the home inspection disclosure required by FHA for all FHA loans.

https://files.hudexchange.info/resources/documents/For-Your-Protection-Get-a-Home-Inspection.pdf

 

[alebrewer]

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

I've tried to read this entire thread, but honestly - it seems like the same stuff is being regurgitated over and over. I guess I've not seen the post where it has been demonstrated that the appraiser's mistake was 'fraud'. Remember - fraud is intentional...

 

[Meandering]

Appraiser Marked Private Septic And Well As Public

I know one who missed it, admitted it right away, and wanted to write the $10,000 check to get it behind him. E&O insisted on fighting it, and ended up paying something like $25,000. Exactly I’m just looking for someone to make it right.

appraisersforum.com

Appraiser Marked Private Septic And Well As Public

I wouldn't want to be that appraiser. I would also be interested in the answer to Michigander's question.

appraisersforum.com

No well or septic inspection by a licensed "inspector" prior to purchase, on behalf of the buyer's interest.

Septic was pumped after agreement of sale accepted, but was the water tested?

If the main drainage line was separated, prior to purchase, the water test would have showed an issue, if the water was contaminated prior to closing. If the main drainage line separated after purchase, this has noting to do with the appraiser.

If the purchase would have been funded via a conventional mortgage, in the middle of a covid pandemic, would any of these conversations be taken place now?


Just point fingers at the appraiser, who checked the wrong box, but even the septic cleaning company could not say the main drainage line was separated.

.


.

 

[Huds_Harm]

Although the above is true. The appraisal is for FHA to decide whether or not the property qualifies for FHA insured financing. Granted the condition of the property is a factor in that decision. But none the less. FHA still does not guarantee the condition of the property. Regardless of what the appraisal says. It is obvious that the appraiser screwed the pooch. None of us know why. I see no way you could hold FHA responsible. It is probably also going to be very difficult to hold the lender responsible. Even if they didn't do all of their due dillegence. Because the end result would have been you just not getting the loan. Did you receive the home inspection disclosure required by FHA for all FHA loans.

https://files.hudexchange.info/resources/documents/For-Your-Protection-Get-a-Home-Inspection.pdf

Again my home inspection does not verify the property meets minimum property requirements. Only the appraiser and Lender verify that.

 

[Huds_Harm]

I've tried to read this entire thread, but honestly - it seems like the same stuff is being regurgitated over and over. I guess I've not seen the post where it has been demonstrated that the appraiser's mistake was 'fraud'. Remember - fraud is intentional...

What would you call going against what it was listed as?

 

[alebrewer]

What would you call going against what it was listed as?

Unless the appraiser was intentionally trying to deceive the lender (remember - you're not the intended user of the report), then it certainly isn't fraud. If this is all about an appraiser (unintentionally) failing to check the correct box(es), then you should not be surprised at the lack of love you're getting on this forum. If you're just looking for validation over crucifying an appraiser for making a pretty simple mistake - you might find more love on a Realtor forum...

 

[Huds_Harm]

View attachment 81087

Appraiser Marked Private Septic And Well As Public

I know one who missed it, admitted it right away, and wanted to write the $10,000 check to get it behind him. E&O insisted on fighting it, and ended up paying something like $25,000. Exactly I’m just looking for someone to make it right.

appraisersforum.com

View attachment 81086

Appraiser Marked Private Septic And Well As Public

I wouldn't want to be that appraiser. I would also be interested in the answer to Michigander's question.

appraisersforum.com

No well or septic inspection by a licensed "inspector" prior to purchase, on behalf of the buyer's interest.

Septic was pumped after agreement of sale accepted, but was the water tested?

If the main drainage line was separated, prior to purchase, the water test would have showed an issue, if the water was contaminated prior to closing. If the main drainage line separated after purchase, this has noting to do with the appraiser.

If the purchase would have been funded via a conventional mortgage, in the middle of a covid pandemic, would any of these conversations be taken place now?


Just point fingers at the appraiser, who checked the wrong box, but even the septic cleaning company could not say the main drainage line was separated.

.


.

Good job researching. Now research what would have been required had the appraiser not concealed the fact it was well and septic.

Included in my closing documents and signed by my lender

Conditional Commitment
Direct Endorsement
Statement of Appraised Value

E. Health Authority Approval: Submit local health authority
approval (on a form or letter) indicating the individual water
supply and/or sewage disposal system is acceptable.

 

[Huds_Harm]

Unless the appraiser was intentionally trying to deceive the lender (remember - you're not the intended user of the report), then it certainly isn't fraud. If this is all about an appraiser (unintentionally) failing to check the correct box(es), then you should not be surprised at the lack of love you're getting on this forum. If you're just looking for validation over crucifying an appraiser for making a pretty simple mistake - you might find more love on a Realtor forum...

If it were just a matter of "checking the wrong box" the following would have been included in the commentary. Specifically as it relates to the well and septic meeting minimum distance requirements per the AMC's 21 point QC checklist.

8Does the report indicate that the sewer is private? If yes, does the
appraiser provide a comment on the availability of public sewer and
if the subject is required to connect? If also on private water, is
there a comment noting if the subject meets the minimum FHA
distance requirements from the well to the storage tank, drain field,
and property? Also, does the appraiser comment if private utilities
are common for the area and if there is any impact on the subject's
marketability?

4. Failure to provide an accurate description of the subject's/project's site and consider site conditions
or external factors that affect value.
• WATER/SEWER: The appraisal must report whether utilities are public or private and typical for
the area. If the subject has private water or septic, report the availability of connection to public
and/or community water or sewer systems and any jurisdictional conditions requiring connection.
The appraiser must be familiar with the minimum distance requirements between private wells and
sources of pollution, and if discernible, comment on them. The appraisal must note any MPR/MPS
deficiencies that are readily observable and require test or inspection.
In case number 512-00000000: Per published listing and online data sources, the Subject property
was connected to an onsite well and sewage disposal system, but not identified, disclosed, or
discussed, and the Appraiser failed to report the availability of connection to a public/community
water and sewer systems, and/or whether there were any jurisdictional conditions requiring
connection.