Judge Rules Appraiser/Lender Owe no duty of care

[Huds_Harm]

Your LOAN was contingent upon the property meeting the lender's requirements, that discretion belonging to the lender. That is nowhere close to saying your PURCHASE was contingent upon those conditions.

My loan was contingent upon FHA Minimum Property Requirements and would not have been funded had the appraiser not concealed the facts.

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.

 

[Huds_Harm]

Nobody said otherwise. The appraiser is on the hook for their errors. But per the legal ruling the judge apparently has ruled that in this case they're not on the hook to you.

You mentioned earlier that the appraiser was required to take some additional education. If that was at the hand of HUD then that might represent what they thought was the appropriate response to an appraisal report with these errors.

What they think is appropriate is attached in their defect taxonomy.

 

[George Hatch]

My loan was contingent upon FHA Minimum Property Requirements and would not have been funded had the appraiser not concealed the facts.

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.

Exactly - the lender's loan was contingent upon these conditions. Not the buyer's purchase. The lender makes the loan decision that's being regulated, and then they have to live with their decision. But the buyer's decision making on the purchase is entirely on them, which puts the outcome on them, too.

These are two totally separate decisions.

I don't know for sure but my guess is that you never asked the lender if they thought you were making the right decision with this property. You didn't ask for their advice and they didn't offer you any.

 

[Huds_Harm]

Exactly - the lender's loan was contingent upon these conditions. Not the buyer's purchase. The lender makes the loan decision that's being regulated, and then they have to live with their decision. But the buyer's decision making on the purchase is entirely on them, which puts the outcome on them, too.

These are two totally separate decisions.

I don't know for sure but my guess is that you never asked the lender if they thought you were making the right decision with this property. You didn't ask for their advice and they didn't offer you any.

Question. Do you perform FHA appraisals?

 

[George Hatch]

Does it matter? Because I taught the appraisal standards course and the state/federal laws and regs course and a bunch of others for 16 years in front of thousands of appraisers. Besides that I know how to read a word for what it says instead of what I want it to say.

You?

 

[Huds_Harm]

Does it matter? Because I taught the appraisal standards course and the state/federal laws and regs course and a bunch of others for 16 years in front of thousands of appraisers. Besides that I know how to read a word for what it says instead of what I want it to say.

It does, and I will take that as a no you don't.

 

[George Hatch]

Why would it matter? Are you under the impression that it takes some special skill set to adhere to their appraisal policies? Are you under the impression that I never learned how to appraise an SFR or have somehow forgotten how to appraise an SFR? Because that's not the reason why I don't often appraise SFRs. Generally speaking, if I'm appraising an SFR its usually because an SFR appraiser has referred it to me due to that property having more moving parts than they want to hassle with.

Instead of attempting to engage me as if you think you're competent at what we do you would be better off to just stick to the content at hand and on its own merits. My HP12c has forgotten more about appraising that you or that atty will ever learn. As is also the case for every one of our regulars on this forum. Our most junior appraisers on this forum have 20 years in at this point. If you intend to argue the intricacies of what they do in their day job you should probably bring a lunch.

 

[Huds_Harm]

Why would it matter? Are you under the impression that it takes some special skill set to adhere to their appraisal policies? Are you under the impression that I never learned how to appraise an SFR or have somehow forgotten how to appraise an SFR? Because that's not the reason why I don't often appraise SFRs. Generally speaking, if I'm appraising an SFR its usually because an SFR appraiser has referred it to me due to that property having more moving parts than they want to hassle with.

Instead of attempting to engage me as if you think you're competent at what we do you would be better off to just stick to the content at hand and on its own merits. My HP12c has forgotten more about appraising that you or that atty will ever learn. As is also the case for every one of our regulars on this forum. Our most junior appraisers on this forum have 20 years in at this point. If you intend to argue the intricacies of what they do in their day job you should probably bring a lunch.

It matter's because you keep using term's like "YOUR LOAN" then its the "LENDER'S LOAN" whenever convenient.

And no need for insults, it doesn't take a rocket scientist to know that a property with required repairs is not allowed to be marked "as is" unless recommended for rejection, and therefore not allowed to fund which is based on the CONTINGENCY CLAUSE.

When you’re considering an FHA loan for your home purchase, it’s essential to understand the contingencies that come with it. These conditions serve as safeguards for both you, the buyer, and the lender, ensuring a fair and secure transaction.

The FHA Amendatory Clause is a safeguard for buyers, allowing them to withdraw from a purchase agreement without penalty if the appraisal value is less than the agreed-upon selling price. It’s essential that all parties involved, including the buyer, seller, and their respective agents, sign this clause to ensure the loan will be insured by the FHA.

Key Components of an FHA Loan Contingency#​

• Loan Approval: The contingency remains until you obtain approval for an FHA loan, safeguarding your commitment to the purchase.
• Appraisal Guidelines: The property must meet specific FHA appraisal standards; otherwise, you have the option to withdraw from the agreement.

Addressing Appraisal Issues and Repairs#​

If the appraisal uncovers problems, the seller is typically responsible for making the necessary corrections. However, if an agreement cannot be reached, you have the option to renegotiate the price or withdraw your offer, provided an FHA financing contingency is in place. This contingency acts as a safeguard, allowing you to back out without penalty if the property doesn’t meet FHA standards.

What's your lunch order?

We can use it for you to tell me again how this is true, "Exactly - the lender's loan was contingent upon these conditions. Not the buyer's purchase."

 

[George Hatch]

I have been entirely consistent in my commentary all along, there's no "when convenient" involved. You're the one who has been using terms inaccurately because if you would stick to the real meanings of these terms you would have realized long before now that when explained in PlainSpeak the words you're using don't support your talking points. We run into this on a regular basis on this forum - the big drawn out disagreements almost always hinge on someone not sticking to the real meanings of the terms they are using.

You haven't gotten there yet and maybe you won't take it this far, but usually the way these drawn out discussions play out is that once the fuzzy thinker finally comes to terms with what the real meaning of the terms they're using their next step is to criticize the meanings themselves and advocate for changing those terms to suit their purposes. That's always a laugh. I'm hoping you're not that emotionally committed to imposing your version of NewSpeak on the rest of us that you would push it that far. But, if you do decide to volunteer for the experience then just know that you're not the first to take up a hopeless position and you won't be the last.

The lender's loan decision is not the same thing and is not made by the same party that makes the buyer's purchase decision. Those two terms are nowhere near synonymous. Words have meanings. Similarly, instructions on how to handle and what boxes to check for a given condition are not the same thing as a definition of that condition. The lender sold you a loan, not a warranty against defective conditions.

Asked and answered, as they say. So now you have come here, you have asked us, and you have been told. Whatever else you thought you were going to accomplish here obviously isn't going to happen.

 

[Surf Cat]

There's no use going back and forth with her Hatch. It's "the appraiser is at fault and responsible" or bust.

No garnered insight from approximately 500 posts. Sidestepping of "intricate details" that would implicate her of negligence on the matter. Advice given and not taken. Side step, evade, it's the appraiser, it's the appraiser.