FHA Septic & Well Appraiser Lawsuit

[shrubberyvaluation]

Your conclusions and assumptions line up perfectly with someone who only wants to deflect their own responsibility onto others. YOU should have ensured there were adequate inspections. Honestly, your responses remind me of a certain current VP.

And yes, if a system DID meet local code regulations when installed, but does not now, then grandfathering absolutely IS an issue.
It is NOT some random FHA loan funding requirement that is pushing your remediation costs close to 6 figures (according to you), it is local codes. If you did not have a loan on this house at all, would the cost to remediate your issue be any different? Honest question...

Its like going after an inspector for making a mistake, and then something breaking in the house after the fact unrelated to that mistake.

 

[Huds_Harm]

Its like going after an inspector for making a mistake, and then something breaking in the house after the fact unrelated to that mistake.

https://appraisersforum.com/forums/...nd-grandfathered-override-known-FHA-d.198800/

 

[alebrewer]

I'm sure it's not common knowledge outside the appraisal world, but the primary reason lenders and AMC's have review appraisers and collateral underwriters, is due to the MANY moving parts within an appraisal report. Neighborhood analysis, zoning analysis, highest and best use analysis, improvements analysis, site analysis, overlay analyses (lender, FHA, Fannie/Freddie, etc.), sales comparison analysis, site value analysis, conformance to state, federal, USPAP, lender, and agency guidelines, etc. (I'm sure I missed something in there) In fact - there are so many moving parts to an appraisal that USPAP (the appraiser's development and reporting guide) explicitly states, "Perfection is impossible to attain, and competence does not require perfection." I'm making no judgement whatsoever about this particular assignment - as I'm not privy to the details - all we're getting is one side -and it is a biased side. What I AM saying, is that there is no such thing as a perfect appraisal.

 

[jay trotta]

PS: it appears the OP has done a significant amount of research in regard to FHA/HUD minimum loan requirements.

I would be interested in the outcome of this action. Not knowing all the components to this is limiting and therefore, will hold any further comments.

 

[Elliott]

Using the OP's reasoning and feelings, he should sue FHA, AMC, Lender, Appraiser, Seller, Listing Realtor, Selling Realtor, Home Inspector, Septic Pumper Company. But the OP also has some responsibility and a level of due diligence. The first and most obvious place to sue are the realtors, since the contract requires arbitration. Basing damages on the 'wrong box' checked didn't cause the drain field to back up and the system to fail (my bet there is past evidence of problems). Throwing money at attorneys is similar to throwing money down a septic tank.

Standard mediation wording:

"MEDIATION: The parties to this Agreement agree to attend, in good faith, mediation with a retired
judge or lawyer with at least 5 years of mediation experience before any lawsuit is led. All notices
of mediation must be served in writing by return receipt requested allowing 30 days for response.
If no response is forthcoming the moving party may then demand binding arbitration under the
terms and provisions set forth below."

 

[Carnivore]

The OP comes across as the Counsel for the Plaintiff


In my neighborhood an appraiser could error on water or sewage availability. My hood is older and when built was originally outside City limits. Each house has its own well and septic tank. Sometime in the past(before I bought my house) neighbors got together and paid out of their pockets to get the city to run water lines but not sewer. Sewer lines are very expensive. My house the previous owner did not hook up to city water even though he was part of the pool of neighbors who paid ahead. When I bought this house, In the MLS listing said City water was available and owner/seller had pre-paid tap fee. MLS also said I had a septic tank. Cool! Since it was vacant I showed the house to myself and told the listing agent her fee would be 3% not 6% She grumbled a little and said OK.

Well, my well went bad. No Problem I hired some guys to dig a trench from tap to the house and hook it up. I just had to let the city know what I did. They sent a City guy to inspect the water line trench to check the depth(18 inches) It was and he signed off and and open the valve. No leaks. I did the back fill myself and seeded.

The land behind and to the side of my house is vacant. This guy buys the land and never has a perk check done from a private owner who also is a Realtor. It was not listed. Guess what it don't perk, So he is about 70K deep in the land purchase. He bought the land Cash. So it has cost him another 90K to run sewer lines. Nice part of this story the city made him run the sewer lines so my hood will eventually get sewer service. The Best news is since I am adjacent to his land and if my Septic system goes bad, I am less than 50 feet from hooking up to city sewer. None the less it still is expensive. Est. 5K cost to me if I have to connect.

The guys mistake was he did not do his due diligence. His other mistake was not walking the land to see how much hardwood was on the site. So the logger charged him a lot more to clear the 4 acre site. Pine is not worth a lot of money.

Did the Owner/Realtor have a duty to tell the buyer about Perk Problems? Remember it was not listed in the MLS.

 

[Tiffany Gibbons]

Update on the FHA appraiser that marked the appraisal as public utilities, despite it being listed as septic and well and including a picture of the water well storage tank, bypassing all requirements on the septic and well. ex. minimum distance requirements.

I received the following from HUD on October 19th 2023, 723 days after reporting the error.

“Ms. xxxxx correctly states that the Mortgagee is required to perform a field review when they receive a complaint from a borrower. HUD Handbook 4000.1 – II.V.A.3.c.ii.(C).(1).(b) Property and Appraisals, Field Reviews, states “The Mortgagee’s appraisal field review sample must include the following… all Mortgages for which the Mortgagee has received a Property complaint from the Borrower(s).” However, this requested review must be ordered by the lender. HUD doesn’t perform or direct valuation reviews. Ms. xxxxx should request such a review from her lender.”

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.

The lender has refused to order the required field review to determine property eligibility for two years despite
HUD stating an interior review is an important part of the field review since a serious oversight
by the appraiser of a noticeable defect in the property could
affect the health and safety of the occupants or the continued
marketability of the property.

and despite the 18 appraisal deficiencies found by HUD's appraisal review below.

It seems the 18 appraisal deficiencies are over the character limit so I will just list the main one

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.

If discernible, readily observable, hmmmm

 

[NC Appraising]

My research found a seceret phone call between the OP and there lawyer. Listen below:

 

[Carnivore]

Handbook dtd 11/09/2021 as revised 8/2/2023 4000.1 Page# 605(at bottom page numbering) p . 1on Site sewage Disposal Systems aka septic tank & Drain field

I can't cut and paste Sorry maybe someone else can

 

[Meandering]

Handbook dtd 11/09/2021 as revised 8/2/2023 4000.1 Page# 605(at bottom page numbering) p . 1on Site sewage Disposal Systems aka septic tank & Drain field

I can't cut and paste Sorry maybe someone else can

link? I'll try the cut and paste