Judge Rules Appraiser/Lender Owe no duty of care

[Surf Cat]

This whole transaction passed through many safety nets and/or precautionary protocols yet, the loan was funded. It's ludicrous to think that the blame rides squarely on the shoulders of the appraiser.

Additionally, it appears that the op "got greedy" with a lawsuit to change / move, the entire water and waste systems as opposed to just dealing with the septic issue. Boo Hoo.... I'm a single mother with two kids.... this is not my fault.

Pieces of the puzzle on this whole transaction are definitely missing.... The story is compelling in that it makes you want to root for the homeowner. However, when you start peeling back the layers of the onion... there's more than meets the eye.

 

[Terrel L. Shields]

You'd think, with all those oil wells, cattle farms, etc.

Oil wells are mapped by the Texas Railroad Commission.

 

[Mike Ault]

This whole transaction passed through many safety nets and/or precautionary protocols yet, the loan was funded. It's ludicrous to think that the blame rides squarely on the shoulders of the appraiser.

Additionally, it appears that the op "got greedy" with a lawsuit to change / move, the entire water and waste systems as opposed to just dealing with the septic issue. Boo Hoo.... I'm a single mother with two kids.... this is not my fault.

Pieces of the puzzle on this whole transaction are definitely missing.... The story is compelling in that it makes you want to root for the homeowner. However, when you start peeling back the layers of the onion... there's more than meets the eye.

Costs like that are not unheard of for "engineered systems" designed to compensate for site deficiencies. Here's a Reddit post from three months ago.

Builder is estimating $80-100k for engineered septic system​

My wife and I are planning on building a semi-custom home with a local developer and are currently checking out options for land. During our budget discussion, we were going over the range of costs and what we should plan for site development costs and one thing the builder told us is that since our area has a lot of clay, a site requiring an engineered septic system could run 80-100k alone. Obviously this is dependent on perc test and other factors, but she said that we may need to consider this possibility.
I mentioned that to my friend and he was telling me he had an engineered system installed in clay for about $15k in Georgia and a Google search is showing $25k on the high end. We do live in a medium-high cost of living area in Michigan, but I'm struggling to see how that alone could account for a 4x increase over the high end range of installing an engineered system. Is this actually in the realm of possibility?

 

[Mike Ault]

Oil wells are mapped by the Texas Railroad Commission.

Some of them. One of the areas that I service, Hutchinson County, has lots of old abandoned oil field infrastructure including wells, pipelines, etc. that nobody knows the location of.

 

[Surf Cat]

Costs like that are not unheard of for "engineered systems" designed to compensate for site deficiencies. Here's a Reddit post from three months ago.

​

Builder is estimating $80-100k for engineered septic system​

My wife and I are planning on building a semi-custom home with a local developer and are currently checking out options for land. During our budget discussion, we were going over the range of costs and what we should plan for site development costs and one thing the builder told us is that since our area has a lot of clay, a site requiring an engineered septic system could run 80-100k alone. Obviously this is dependent on perc test and other factors, but she said that we may need to consider this possibility.
I mentioned that to my friend and he was telling me he had an engineered system installed in clay for about $15k in Georgia and a Google search is showing $25k on the high end. We do live in a medium-high cost of living area in Michigan, but I'm struggling to see how that alone could account for a 4x increase over the high end range of installing an engineered system. Is this actually in the realm of possibility?

Okay..... it's expensive to put in a well and a septic system. But the OP bought the subject property "as is, where is", from an investor who acquired it from an estate sale. I'm going to make an assumption that this property is probably pretty old. Especially given the fact that the well and septic systems distance between each other, is not up to code.

I mean..... the home inspector "couldn't find" the septic system but you push on anyways?

The OP was extremely evasive when I asked what did the people who pumped the septic tank say and report? What did the people who filled and drained the system say and report? WHEN did these two procedures take place? Before or after signing on the dotted line? Forget that, let's talk about the FHA appraisal communication protocol.

 

[Mike Ault]

Okay..... it's expensive to put in a well and a septic system. But the OP bought the subject property "as is, where is", from an investor who acquired it from an estate sale. I'm going to make an assumption that this property is probably pretty old. Especially given the fact that the well and septic systems distance between each other, is not up to code.

I mean..... the home inspector "couldn't find" the septic system but you push on anyways?

The OP was extremely evasive when I asked what did the people who pumped the septic tank say and report? What did the people who filled and drained the system say and report? WHEN did these two procedures take place? Before or after signing on the dotted line? Forget that, let's talk about the FHA appraisal communication protocol.

She was evasive about a number of issues. And Tiffany's "90 day Flipper suspicions" may well turn out to be correct. However, this is a good object lesson for all about the importance of "checkboxes", and I'm glad she posted her dilemma here.

 

[George Hatch]

The alternative is equally possible; maybe she was just looking for a quiet place to raise her kids and work that WFH gig outside of the metro.

Hopefully the reason she's homeless now doesn't have anything to do with a job loss. With 4 kids she might be getting half the ex's income.

 

[Terrel L. Shields]

Some of them. One of the areas that I service, Hutchinson County, has lots of old abandoned oil field infrastructure including wells, pipelines, etc. that nobody knows the location of.

I think there is an orphan well commission that seeks those out to remediate if leaking. Maybe that's only in OK. In OK wells before WWII was often not recorded. It was kind of haphazard. I have records for wells from the 1910s in NE Oklahoma but not all of them. I've seen entire fields with only cows and grass and maps showing one well every 220' apart once existed. And it is why the local water wells are all salty.

 

[Tiffany Gibbons]

She was evasive about a number of issues. And Tiffany's "90 day Flipper suspicions" may well turn out to be correct. However, this is a good object lesson for all about the importance of "checkboxes", and I'm glad she posted her dilemma here.

Me too. I have definitely made it a point to put everything available in the report and more disclaimers. I quit doing any FHA appraisals as well. All that turning new appliances on, running water, flushing toilets, checking the "eyes" on automatic garage door openers. I have to clear spider webs off my GDO periodically or it won't close. Or sometimes putting the lawn equipment up, we knock the "sights" out of line. Never thought about suing the appraiser over it.

 

[Tiffany Gibbons]

So, the property is unlivable. That's a worst case scenario. I would have just documented the history of this situation and engage in a strategic default. Rent for a bit and then try again. As opposed to compounding the loss by throwing lawyers at the long shot. She might have even been able to negotiate for the lender to not report it on her credit.

Yeah, around here a single mother with all those kids would put an ad for help on Nextdoor.com or start a Go Fund Me or something. Seems like free legal aid help would be a place to start. But then, low earner single moms wouldn't typically be buying waterfront property either. Kind of like the HUD 203K loans can't be used for luxury items like putting in a pool or hot tub.