Judge Rules Appraiser/Lender Owe no duty of care

[Huds_Harm]

It is not "CYA" commentary. It is part of the standards and ethics we are bound by that is part of law or regulation.

So is this - The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading. The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services. The appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity. U

 

[Dublin ohio]

So is this - The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading. The Appraisal Standards Board promulgates USPAP for both appraisers and users of appraisal services. The appraiser’s responsibility is to protect the overall public trust and it is the importance of the role of the appraiser that places ethical obligations on those who serve in this capacity. U

What is your point. If you are claiming a USPAP violation. Take your complaint to the proper venue first.

 

[Dublin ohio]

Yes and I already know this angle too. I was supposed to proof it and catch the errors but I'm not an intended user correct?

The article wasn't really clear on the home inspection details. Did you get a home inspection and if you did. Did the inspector flag the well and septic

 

[Dublin ohio]

What is your point. If you are claiming a USPAP violation. Take your complaint to the proper venue first.

Maybe you misunderstood the term "venue". I mean the proper governing authority

 

[Huds_Harm]

The article wasn't really clear on the home inspection details. Did you get a home inspection and if you did. Did the inspector flag the well and septic

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.

 

[Huds_Harm]

Maybe you misunderstood the term "venue". I mean the proper governing authority

I fully understood and it has been filed there as well.

 

[George Hatch]

How many angles of deflection are there? The buyer pays for the product. This is the only industry where a consumer pays for something and the provider can CYA their way out of it.

What happens when the lender has no need to “worry about” it because FHA insures the loan and they get paid regardless?

FRAUD happens

The facts of the situation are not as self-serving as might appear.

The appraiser is being engaged by the lender. The appraiser is working to the requirements of the lender's appraisal policies. The appraiser is preparing the appraisal for the lender's usage and to enable the lender's decision making. The appraiser is being paid by the lender, regardless of where the lender is getting the money to pay the appraiser.

The consumer has a right to a copy of the report but they don't have a relationship of any kind with the appraiser. They are not the appraiser's client. The appraiser doesn't even have the discretion to provide the consumer with that copy - they must defer that request to the lender because the lender controls the distribution of the report. The appraisal wasn't prepared for the consumer's use, the consumer's off-label usage will sometimes have different and conflicting purposes than the intended usage as stated in the report and the consumer's expectations for the appraisal are neither communicated to the appraiser or assumed by the appraiser.

None of that is to say the appraiser gets a free pass for their errors, particularly if there are indications of significant errors of omission or commission or possible violations of the consumer's rights; but the appraiser's relationship is with the lender. It is within this context that the consumer's status to the appraiser-client relationship is that of a 3rd party.

Now the legal implications and applicability are decided based on the law and per the judicial decisions. Similarly, the underwriting policies at FHA are established at that level and are also subject to the requirements of the law. There might be a case against the appraiser for their errors, but what you really need here is legal advice from a lawyer.

The state appraisal board has no authority by which to collect from the appraiser to make the borrower whole; all they can do is levy a fine or suspension of their license or other disciplinary action. The Appraisal Foundation has no jurisdiction over the appraisers, either; and HUD doesn't have any more leverage on the appraiser than does the originating lender.

The only way the appraiser pays is via getting sued, at which point their errors and omissions insurance may pay out.

 

[Fernando]

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.

Was a real estate agent involved?
In CA, in estate sales, the heir many times haven't lived at the property and not aware of the details and defects of the property.
Thus homes listed for sale from estate sales are usually sold "as is" condition and buyers need to due diligence in finding out more about the property.
I never done a septic tank appraisal so I can't give much help but agent should have been more involved in helping the buyer and even the appraiser in disclosing what material fact was known.

 

[shrubberyvaluation]

Yes and I already know this angle too. I was supposed to proof it and catch the errors but I'm not an intended user correct?

You got your funding I assume. The parties with the grievance would be HUD and the lender. The government is trying to pawn off home inspector to an appraiser. If your representation didn't tell you to get someone working for you to get an inspector I would blame them. Also if these items are critical why would the inspector not point them out?

 

[shrubberyvaluation]

The facts of the situation are not as self-serving as might appear.

The appraiser is being engaged by the lender. The appraiser is working to the requirements of the lender's appraisal policies. The appraiser is preparing the appraisal for the lender's usage and to enable the lender's decision making. The appraiser is being paid by the lender, regardless of where the lender is getting the money to pay the appraiser.

The consumer has a right to a copy of the report but they don't have a relationship of any kind with the appraiser. They are not the appraiser's client. The appraiser doesn't even have the discretion to provide the consumer with that copy - they must defer that request to the lender because the lender controls the distribution of the report. The appraisal wasn't prepared for the consumer's use, the consumer's off-label usage will sometimes have different and conflicting purposes than the intended usage as stated in the report and the consumer's expectations for the appraisal are neither communicated to the appraiser or assumed by the appraiser.

None of that is to say the appraiser gets a free pass for their errors, particularly if there are indications of significant errors of omission or commission or possible violations of the consumer's rights; but the appraiser's relationship is with the lender. It is within this context that the consumer's status to the appraiser-client relationship is that of a 3rd party.

Now the legal implications and applicability are decided based on the law and per the judicial decisions. Similarly, the underwriting policies at FHA are established at that level and are also subject to the requirements of the law. There might be a case against the appraiser for their errors, but what you really need here is legal advice from a lawyer.

If your allegation is that the appraiser (but not the home inspector) should have been able to ascertain that the septic system had major operating problems then that's quite a stretch.

It seems to me there are seperate issues going on but the main issue stems from the septic issues discovered after closing, and the rest is ancillary and the buyer probably wouldn't care about them if not for the cost of the septic system, at least not to this extent. So now its find things wrong with the report. If there were issues with the deck and/or fence that were detrimental I'd assume the home inspector would of pointed them out. So the appraiser checked public sewer, eureka maybe I have a case to get $$$ for the failed septic system.

I saw an appraisal done when my dad purchased his property. It had errors, he didn't complain because he got his funding, and quite frankly didn't even know them til I pointed them out, and some were material to value in my opinion including the measurements of the house.