Judge Rules Appraiser/Lender Owe no duty of care

[George Hatch]

Here is the definition of Market Value being used in these reports. Kindly note that it's cast in terms of the actions of the market participants. Not the lenders. What the property is worth to FHA or any/all entities other than the market participants is irrelevant because their perspectives are not the ones the appraiser is being tasked to emulate.



That doesn't mean that the appraiser didn't commit errors WRT the property fitting FHAs underwriting criteria, only that there is no distinct and different definition at FHA for what "as is" actually means. "Mark this box" means what the appraiser is supposed to do to notify FHA when the property does/doesn't fit their underwriting criteria. That's the (septic-related) error the appraiser made.

 

[George Hatch]

And the appraiser did not comply to them.

That's a great retort to an argument that nobody made. Everyone is in agreement that the appraiser didn't comply with the specifics of FHAs policies. And that the appraiser deserves to get disciplined or sued by FHA as they see fit. Nobody here is sticking up for the appraiser's error, even though probably half of the FHA appraisers would likely have missed it, too.

Meanwhile, the common definition and usage of the term "as is" remains. "federal definition of as is" appears to be a fictional construct that doesn't actually exist.

You signed a sales contract with the seller. I don't know for sure but I am assuming the term "as is" was used in that sales contract - to which you signified that you agreed with when you signed that sales contract. THAT "as is" wasn't defined at FHA, either.

 

[jay trotta]

In December of 2020 recently divorced borrower and single mother of two found a quaint home in the country, 60 miles from their previous, to start over with her children. She spent the prior two years sacrificing and rebuilding her credit her ex-husband destroyed, to earn the right to become a homeowner. She submitted an FHA offer and scheduled her own home inspection. As most home inspections do, the inspector flagged numerous items that she added in an amended sales contract for the seller to have fixed. The listing stated the property was well and septic, however the seller, who was an investor, purchased the home as an estate sale therefore did not know its location, nor was it on the survey. She asked to have the tanks pumped in order for the seller to locate it. It was located weeks after her home inspection and left uncovered in the home’s front flower bed less than 10ft from the home’s front door prior to appraisal for the appraiser to observe.

Just curious; "the inspector flagged numerous items that she added in an amended sales contract for the Seller to have fixed" so in the context of the Amended Sales Agreement, were the repairs made??

 

[Huds_Harm]

That's a great retort to an argument that nobody made. Everyone is in agreement that the appraiser didn't comply with the specifics of FHAs policies.

Meanwhile, the common definition and usage of the term "as is" remains. "federal definition of as is" appears to be a fictional construct that doesn't actually exist.

You signed a sales contract with the seller. I don't know for sure but I am assuming the term "as is" was used in that sales contract - to which you signified that you agreed with when you signed that sales contract. THAT "as is" wasn't defined at FHA, either.

If you think the federal definition of "as is" meaning AFTER ALL MINIMUM PROPERTY REQUIREMENTS ARE MET, does not exist I hope you do not perform FHA appraisals.

 

[Huds_Harm]

In December of 2020 recently divorced borrower and single mother of two found a quaint home in the country, 60 miles from their previous, to start over with her children. She spent the prior two years sacrificing and rebuilding her credit her ex-husband destroyed, to earn the right to become a homeowner. She submitted an FHA offer and scheduled her own home inspection. As most home inspections do, the inspector flagged numerous items that she added in an amended sales contract for the seller to have fixed. The listing stated the property was well and septic, however the seller, who was an investor, purchased the home as an estate sale therefore did not know its location, nor was it on the survey. She asked to have the tanks pumped in order for the seller to locate it. It was located weeks after her home inspection and left uncovered in the home’s front flower bed less than 10ft from the home’s front door prior to appraisal for the appraiser to observe.

Just curious; "the inspector flagged numerous items that she added in an amended sales contract for the Seller to have fixed" so in the context of the Amended Sales Agreement, were the repairs made??

They were.

 

[George Hatch]

If you think the federal definition of "as is" meaning AFTER ALL MINIMUM PROPERTY REQUIREMENTS ARE MET, does not exist I hope you do not perform FHA appraisals.

I'm sorry you feel that way, but IRL those still aren't definitions. They're instructions on how to proceed on the report form when those conditions are present.

This is what a codified Definitions section of a law, rule, regulation or policy looks like. This definitions section (fragment) actually is taken from federal law and actually does relate to appraisals and appraisers. If you could cite something like one of these then that would support your novel and inventive use of the term "different federal definition of as is"

Note the syntax being used: "xxxxxxx" means....."

From your description, if your atty based their argument on some fictional construct instead of their other modes of criticism then I'm not surprised at how the judge handled it. Remember, the judge's job is to read the law as is actually stated; not to provide equitable outcomes in isolation of the law as is actually stated.

 

[jay trotta]

Three months later, the borrower began experiencing plumbing issues and learned the well and septic system needed to be completely replaced

IMO-Not from your area, but I would be more inclined to view; how those numerous flagged items were repaired by the Seller, as part of the Sales Contract. Did those repairs impact the well functionality? IMO-90 days would appear to be a band aid on a more serious problem.

One other question; the buyer learned about the issues how?

 

[Huds_Harm]

I'm sorry you feel that way, but IRL those still aren't definitions.

This is what a codified Definitions section of a law, rule, regulation or policy looks like. This definitions section (fragment) actually is taken from federal law and actually does relate to appraisals and appraisers. If you could cite something like one of these then that would support your novel and inventive use of the term "different federal definition of as is"

Note the syntax being used: "xxxxxxx" means....."

Here's one

 

[Huds_Harm]

Three months later, the borrower began experiencing plumbing issues and learned the well and septic system needed to be completely replaced

IMO-Not from your area, but I would be more inclined to view; how those numerous flagged items were repaired by the Seller, as part of the Sales Contract. Did those repairs impact the well functionality? IMO-90 days would appear to be a band aid on a more serious problem.

One other question; the buyer learned about the issues how?

None of the flagged items were related to the well or septic.

 

[George Hatch]

Semantics. Exactly so. The entire purpose of incorporating a Definitions section directly into the law/regs where they are being used is to prevent people from getting away with using fuzzy and undefined terms (like "federal definition of as is") in lieu of the real definitions as they actually exist.

Lawyers exist to carefully parse the meanings of these terms as are used in civil and criminal and administrative settings. Way of the world.