Appraiser Marked Private Septic And Well As Public

[EddieB]

If seller disclosure states private and states in proper working order then you may want to go that avenue.

 

[Mark K]

.... now I am in an FHA loan on a home that does not qualify.

Not sure what the issue re: the existing FHA loan? You already own the home. Its not like FHA is going to come to you and force you to give back the money. So what if it doesn't qualify today? The loan is closed, you have your mortgage. That's a non-issue.

The issue is if it can be cured and whose liability and that will be for the lawyers and E&O insurance companies to hash out.

I've seen systems fail where the house was previously occupied by one or two people and the system worked fine and the new family has 5-7 people and they overload and/or abuse the system.

What does the county/city say about the minimum distance between well/septic? Go by the county requirements, not FHA. If it needs a new septic can it be moved sufficiently far from the well? Also, there are various types of septic systems available today; surely there's one that will work.

If the previous owner was aware of a problem and didn't disclose it, there's some liability there. I also suspect that the lawyers will find liability in other places too because I'm certain that lawyers will be getting involved soon.

BTW, were you aware it had a septic system but didn't get it inspected? That's on you.

 

[Flakey]

You should seek competent legal advice.

 

[Huds_Harm]

Not sure what the issue re: the existing FHA loan? You already own the home. Its not like FHA is going to come to you and force you to give back the money. So what if it doesn't qualify today? The loan is closed, you have your mortgage. That's a non-issue.

The issue is if it can be cured and whose liability and that will be for the lawyers and E&O insurance companies to hash out.

I've seen systems fail where the house was previously occupied by one or two people and the system worked fine and the new family has 5-7 people and they overload and/or abuse the system.

What does the county/city say about the minimum distance between well/septic? Go by the county requirements, not FHA. If it needs a new septic can it be moved sufficiently far from the well? Also, there are various types of septic systems available today; surely there's one that will work.

If the previous owner was aware of a problem and didn't disclose it, there's some liability there. I also suspect that the lawyers will find liability in other places too because I'm certain that lawyers will be getting involved soon.

BTW, were you aware it had a septic system but didn't get it inspected? That's on you.

I did get a home inspection but it did not include septic as it couldn’t be located at the time of inspection and is not on the survey however by the time of appraisal it was located and access available to inspect. Being that an FHA appraisal is supposed to ensure the home meets all FHA requirements I assumed the appraiser would do their due diligence. The FHA loan is not the issue. It’s the fact that the home does not qualify for one and I would not have a 60k bill if the appraiser marked it as private rather than public. The property may not even be big enough to fit a replacement system that meets all distance requirements.

 

[Mike Kennedy]

The appraiser on the property I purchased with an FHA loan marked my water and sewer as public therefore the required FHA tests and minimum distance requirements were not performed. The system has not only failed it will cost upwards of 60k to bring up to health and safety standards due to the size of the lot and having to move the well. The property does not qualify for a FHA loan due to the distance from the septic to the well as is being only 40ft. Any advice on who is liable?

IF there were RE Agents involved.......... what was their take on, was it a private sale or exposed to the market via MLS listing?? Did you or your Agent review the current municipal assessment and other docsincluding a site survey?

re who is liable - possibly the sellers, their agent, your agent, and your attorney who it seems failed in due diligence. IF you financed the purchase - the Lender's Underwriter as well.

Consult an Attorney prior to taking action.

 

[Tom4value]

You should seek damages for repair. Go after the appraiser, broker and home inspector. Even if they didn’t know the exact location, knowing if it is on public water/sewer is standard due diligence for all three parties. You bought the property thinking it was on public water and sewer.

 

[James Micozzi]

You should seek damages for repair. Go after the appraiser, broker and home inspector. Even if they didn’t know the exact location, knowing if it is on public water/sewer is standard due diligence for all three parties. You bought the property thinking it was on public water and sewer.

Sorry Tom4value. The OP already said he knew it was a private septic system. He also did not make an issue out of it until after closing when he had an issue with sewage backup. The broker marked it a private on the MLS as well according to the OP prior post. As for the home inspector not being able to locate it, that is nothing new. Home inspectors are a joke today. They have more CYA commentary in their reports than appraisers. LMAO.

In my opinion, why didn't the original poster have the septic system tested by a qualified expert prior to closing? there is definitely more to this story

 

[Huds_Harm]

Sorry Tom4value. The OP already said he knew it was a private septic system. He also did not make an issue out of it until after closing when he had an issue with sewage backup. The broker marked it a private on the MLS as well according to the OP prior post. As for the home inspector not being able to locate it, that is nothing new. Home inspectors are a joke today. They have more CYA commentary in their reports than appraisers. LMAO.

In my opinion, why didn't the original poster have the septic system tested by a qualified expert prior to closing? there is definitely more to this story

I also stated at the time of appraisal it was located and access available to inspect. Being that an FHA appraisal is supposed to ensure the home meets all FHA requirements I assumed the appraiser would do their due diligence. The FHA loan is not the issue. It’s the fact that the home does not qualify for one and I would not have a 60k bill if the appraiser marked it as private rather than public. The property may not even be big enough to fit a replacement system that meets all distance requirements.

 

[Terrel L. Shields]

Being that an FHA appraisal is supposed to ensure the home meets all FHA requirements I assumed the appraiser would do their due diligence. The FHA loan is not the issue. It’s the fact that the home does not qualify for one and I would not have a 60k bill if the appraiser marked it as private rather than public. The property may not even be big enough to fit a replacement system that meets all distance requirements.

The appraiser was incorrect as to "public". The lender carries the responsibility I presume. So what you need is something beyond a bunch of appraisers speculating about this. You need a good lawyer.

 

[Huds_Harm]

The appraiser was incorrect as to "public". The lender carries the responsibility I presume. So what you need is something beyond a bunch of appraisers speculating about this. You need a good lawyer.

Exactly
4155.2 4.1.b Lender Responsibility for Appraisals
Lenders, including sponsoring lenders, are equally responsible, along with appraisers, for the quality, integrity, accuracy and thoroughness of appraisals. The lender will be held accountable if it knew, or should have known, that there were problems with the integrity, accuracy and thoroughness of an appraisal submitted to FHA for mortgage insurance purposes. Lenders that submit appraisals to HUD that do not meet FHA requirements are subject to the imposition of sanctions by the HUD Mortgagee Review Board (MRB).