Judge Rules Appraiser/Lender Owe no duty of care

[Fernando]

The lender is a costless participant due to the FHA backing the loan, which breeds fraud and no incentive for a lender to verify a home meets MPR because once it closes, they get to use the CYA form "for your protection get a home inspection" to absolve them of their duties.

Lender takes back loans if FHA finds something wrong with it. Same with Fannie Mae loans.
Lenders don't want to take back loans because they always will lose money.
Each lender has own ways of making sure the loans comply to these agencies' guidelines having their own reviewers check on the appraisals.

 

[Huds_Harm]

The allegation of fraud attributes the error to intent.

When I review appraisals I NEVER allege intent when I find an error because I know it's almost impossible to meet the burden of proof of that motivation without an outright admission of guilt. I stick to what I can show - "the report includes this error".

Courts are not about "what is" so much as about "what we can prove".
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Beyond that I'm not sure why you're even arguing these points with us because the judge's decision appears to base based on a matter of law. If there's an error in their decision the only remedy is via appeal.

I agree which is why I did not claim fraud, but it is hard to ignore the fact she refused to provide all pictures taken at the property, and instead only produced the appraisal because she intentionally cropped out multiple items in the appraisal pictures as well as checked boxes that they did not exist.

 

[Huds_Harm]

Lender takes back loans if FHA finds something wrong with it. Same with Fannie Mae loans.
Lenders don't want to take back loans because they always will lose money.
Each lender has own ways of making sure the loans comply to these agencies' guidelines having their own reviewers check on the appraisals.

Not when HUD relies on the lender to self report the error and lets them choose the severity category which leads to no consequence from HUD.

Read the article when you get a chance.

 

[Tiffany Gibbons]

Also, I think a listing agent, who in this case was the seller's wife, should have some sort of knowledge of what will and won't qualify for FHA so to not waste anyone's time or money with an offer.

What about your agent?

 

[Surf Cat]

Caveat venditor is a Latin term meaning “let the seller beware,” in contrast to the more widely known saying caveat emptor (let the buyer beware). The principle of caveat venditor cautions that the seller is responsible for any problem that the buyer might encounter with a service or product.

What the borrower DID OR DIDNT do does not absolve the appraiser/lender of their requirements and responsibilities especially those that are contingent on the loans approval.

The U.S. has generally shifted from caveat emptor to caveat venditor, or, "let the seller beware."

Anyway..... based on your answer, the buyer "DID NOT" have the septic tank inspected.

Let's go back to the beginning. What did the MLS listing state about the condition of the subject property? Realtors have a fiduciary responsibility as well. How did the Brokerage and the agent portray the condition of this property?

 

[Huds_Harm]

What about your agent?

What about her? Are buyers agents required to verify the property meets MPR?

 

[Fernando]

The U.S. has generally shifted from caveat emptor to caveat venditor, or, "let the seller beware."

Anyway..... based on your answer, the buyer "DID NOT" have the septic tank inspected.

Let's go back to the beginning. What did the MLS listing state about the condition of the subject property? Realtors have a fiduciary responsibility as well. How did the Brokerage and the agent portray the condition of this property?

I would think local agents are aware of septic tanks can be costly if there are problems.
Again, I never done a septic tank because they are rare in my area.
Yet if they were common, as an agent and appraiser I would be careful and cautious in discussing septic tanks and put many disclaimers because I'm not a septic tank expert.

 

[Raven59]

It was not conventional.

1. APPROVAL OF FINANCING: Approval for the financing described above will be deemed to have been obtained when Buyer Approval and Property Approval are obtained.
2. PROPERTY APPROVAL: If Buyer’s lender determines that the Property does not satisfy lender’s underwriting requirements for the loan (including but not limited to appraisal, insurability, and lender required repairs) Buyer, not later than 3 days before the Closing Date, may terminate this contract by giving Seller: (i) notice of termination; and (ii) a copy of a written statement from the lender setting forth the reason(s) for lender’s determination. If Buyer terminates under this paragraph, the earnest money will be refunded to Buyer. If Buyer does not terminate under this paragraph, Property Approval is deemed to have been obtained.

Although rare, I have seen FHA veer off-center from its minimum property standards. The underwriter, employed/contracted by the lender, owns the deal and can override anything the appraiser states or requires. The bold print in your post is the lender's burden, not the appraiser's. Maybe this thread should spend time beating up the lender and AMC (if involved).

 

[Huds_Harm]

The U.S. has generally shifted from caveat emptor to caveat venditor, or, "let the seller beware."

Anyway..... based on your answer, the buyer "DID NOT" have the septic tank inspected.

Let's go back to the beginning. What did the MLS listing state about the condition of the subject property? Realtors have a fiduciary responsibility as well. How did the Brokerage and the agent portray the condition of this property?

It was an estate sell therefore there was no sellers disclosure in the previous transaction.

 

[Surf Cat]

I would think local agents are aware of septic tanks can be costly if there are problems.
Again, I never done a septic tank because they are rare in my area.
Yet if they were common, as an agent and appraiser I would be careful and cautious in discussing septic tanks and put many disclaimers because I'm not a septic tank expert.

So you're saying the agent would hide the fact that the septic tank was suspect? Lol