Judge Rules Appraiser/Lender Owe no duty of care

[Raven59]

FHA will not accept anything less than 75ft between well and septic. This property even with repair cannot qualify.
How is it that the appraiser has admitted to the error and omission, but her e and o insurance are not obligated to fix it?

I respectfully disagree. I have been in multiple cases that conflict with your conclusion. My explanation was offered from direct involvement in similar scenarios. Scenarios that involved communication with HUD. My cases involved a well and septic within 15 feet of each other, the subject well within 5 feet of the subject property line and the septic on the neighbor property and within 25 feet of the well, six properties on the same water well, no water or sewer source within the property boundaries, and a water well in the crawl space. All conflict with HUD.

There are exceptions. I realize that is not what you want to hear although it will help you someday if the property is put up for sale.

 

[George Hatch]

Back when Cuomo was in charge of HUD, they were way out over their skis generating publicity for him with TV commercials of appraisers "wiggling pipes in basements" to reassure borrowers their property would be free from defects, & safe to move into. I checked one time, and HUD issued an average of six press releases a day during his tenure, most of which were strictly to generate publicity for his further political aims. One of his press releases indicated that his department would assist borrowers in suing appraisers for "triple damages" should the need arise. So, in my opinion, the borrower can be forgiven for expecting some sort of HUD "warranty" on her FHA loan.

I think that's an argument that could possibly fly in court. But if not explicitly stated somewhere at the time of the loan then what we're arguing is the borrower's perceptions, not the actual terms of the loan itself.

 

[Mike Ault]

I don't remembered Cuomo as head of HUD. I doubt many today remember what he said.

No, he didn't offend anybody back then with his BS media campaign with the exception of appraisers. We were an easy target to heap abuse upon for publicity's sake, because we have no constituency whatsoever. He even issued one press release that stated his department would start investigating "hate crimes on the Internet". Nothing ever came of that, but it generated a great headline for him.

 

[Fernando]

No, he didn't offend anybody back then with his BS media campaign with the exception of appraisers. We were an easy target to heap abuse upon for publicity's sake, because we have no constituency whatsoever. He even issued one press release that stated his department would start investigating "hate crimes on the Internet". Nothing ever came of that, but it generated a great headline for him.

I don't do that many FHA loans so I not aware of what HUD leader announced.
Hard to believe but I wasn't aware of who was in charge of HUD until some forumites complained a lady named Fudge. I never heard of a surname Fudge.

 

[Mike Ault]

I don't do that many FHA loans so I not aware of what HUD leader announced.
Hard to believe but I wasn't aware of who was in charge of HUD until some forumites complained a lady named Fudge. I never heard of a surname Fudge.

Cuomo was responsible for the VC sheets. This is what appraisers previously had to document for properties on well and septic systems. The requirements didn't change, just the documentation thereof.

 

[Dublin ohio]

Cuomo was responsible for the VC sheets. This is what appraisers previously had to document for properties on well and septic systems. The requirements didn't change, just the documentation thereof.

View attachment 89196

The VC sheet was out long before Cuomo got involved

 

[Mike Ault]

The VC sheet was out long before Cuomo got involved

You might be right about that. I associate everything I never liked about HUD with Cuomo. On second thought, I just checked, and found this…

The Homebuyer Summary and Valuation Condition (VC) Sheet was required for mandatory use in FHA appraisals on September 10, 1999, as announced in Mortgagee Letter 99-22. The VC sheet was for FHA use only and required that any issues that didn't meet expectations be corrected or repaired before closing. However, HUD retired the VC sheets in January 2006, when they also made Fannie Mae report forms mandatory. After that, any valuation condition concerns, such as repairs, inspections, and alterations, had to be reported in the relevant section of the Fannie Mae form.

And this…

Secretary Andrew Cuomo - HUD Archives

HUD Archives (.gov)
https://archives.HUD.gov › secretaries › cuomoindex

Secretary Andrew Cuomo was the 11th U.S. Secretary of Housing and Urban Development serving from Jan. 29, 1997 to Jan. 20, 2001.

Which leads me to to the conclusion that my initial finger pointing towards him, was correct.

 

[Fernando]

Cuomo was responsible for the VC sheets. This is what appraisers previously had to document for properties on well and septic systems. The requirements didn't change, just the documentation thereof.

View attachment 89196

Learned more about septic tanks than I will ever need to know.
If I ever decide to buy a home in Texas for the no state tax savings (I'll save tens of thousands of dollars), I would like to have you as my real estate consultant in dealing with wild west ways of Texas real estate.

 

[Dublin ohio]

Learned more about septic tanks than I will ever need to know.
If I ever decide to buy a home in Texas for the no state tax savings (I'll save tens of thousands of dollars), I would like to have you as my real estate consultant in dealing with wild west ways of Texas real estate.

Septic tanks are not "wild west". Pretty common in most rural areas. Wouldn't expect you to run into them unless you do rural or fringe suburban

 

[Fernando]

Septic tanks are not "wild west". Pretty common in most rural areas. Wouldn't expect you to run into them unless you do rural or fringe suburban

If common in "wild west" of Texas, shouldn't buyers and agents be more aware of these septic tank issues and potential cost if failure.