Judge Rules Appraiser/Lender Owe no duty of care

[Tiffany Gibbons]

so much for confidentiality...

Yeah, that was a big deal like 8 years ago, and I was public service so it didn't apply.

 

[Fernando]

You're a property owner in a county that runs a GIS system that shows a ton of information about the property itself as a matter of public record and which available to anyone who knows how to look. Which that's the kind of info that could have helped us understand the property attributes that you omitted from your description.

According to the County's info online, which includes overlays for the topography and floodplain as well as the lot lines for this parcel, is located in unincorporated County area, parcel backs to an actual creek, the topo slopes down from the structure to the creek and the entire rear yard is located in the floodplain. The structure appears to +/- abut the southern lot line, and the same appears to be true for the parcel to the north, the lot width itself being ~100ft. The s/w corner of the structure is about 70ft from the rear lot line and the n/w corner is about 125ft from the lot line. Regardless of the HUD MPRs, the county probably has very distinct limitations as to how close a septic install can be to the creek, and possibly similar for the well.

This is all info about the property which could have helped us greatly WRT understanding this situation. We could have entirely skipped most of the discussion - which you also perpetuated - about difficulty and costs of relocating a well and septic in a situation like this. So some of the responsibility for those exchanges - and your chronic irritation with our references to what we know about the normal costs of redoing an existing septic install - rests on you. You could have avoided all the controversy by merely answering these questions the first time they came up.

FYI, appraisers get lied to about property attributes on a regular basis. So the act of not simply accepting your opinions and commentary at face value becomes part of our normal process for solving appraisal problems.

At least now we can better understand one reason why the tank location was sited so closely to the structure. The developer probably decided it was safer to locate it as far as possible from the creek. And for a 1970s build it appears the County concurred.

Appraiser's intuition that full story wasn't given. Appraisers need all the facts. Sometimes owner doesn't give it.
Did buyer put lot of money into remodeling since purchase? Money invested, Buyer still wants to keep property and wants someone to pay for the septic problem.

 

[Tiffany Gibbons]

Yes, of course. That doesn't mean that connecting the dot between an existing septic and the setbacks to a creek is typical practice for SFR appraisers, though; even when there's a flood zone. I go to these lengths and more in my day job because I appraise a lot of land, of all types including SFR lots. I wouldn't normally do it for an SFR assignment though, not unless I saw something that raised my curiosity on it. Functional as of the date of the appraisal is just that - functional.

WRT what I do for a property with existing improvements and occupancy vs what I do when appraising land is that what's permissible for an existing structure is sometimes different than what's permissible for any new development that would be built on the site I'm appraising. Permissible when built is how most buyers and sellers treat such conditions, whereas the buyer for land has to consider the current development criteria.

Now I refer to what appraisers normally do, but IRL that also varies by locale. If there is a lot of flooding and well contamination and septic failures in an area the local appraisers will know to be looking for them. So what appraisers look for in one region might consist of different quirks than what they would look for in another region.

Remember, the County would have been the responsible party for issuing its permitting in the 1970s, even in TX. In lieu of information to the contrary most everyone would otherwise assume that a permitted system which functioned for 40+ years would still be sufficient for purpose.

I know, I know; you don't care about any of that. You just want to defer the point that FHA may have declined the loan app if they were aware of the truth of these facts.

If I were a savvy atty I'd look into the sale and financing history of every parcel backing that creek (and others in the area) to see what FHA and other lenders have been doing with them. That would be more indicative (and factually supportable) of what they were actually doing than assuming they strictly adhered to that aspect of their MPRs in that region. Of which I have no idea one way or another. In appraisal parlance that's a question to be asked/answered, not an assumption to make.

She paid $650 and the AMC kept $200 of the fee. Cheapest

 

[Fernando]

She never mentioned about the buyer's agent. From Texas MLS, would someone know who was the incompetent buyer's agent?

 

[Tiffany Gibbons]

So in your professional opinion did she have a duty to disclose the information?

When you signed the contract with the parcel number, address. Legal description, etc.. you as the buyer have access to the public information of the property you are purchasing, because it is available to the general public.

 

[Huds_Harm]

When you signed the contract with the parcel number, address. Legal description, etc.. you as the buyer have access to the public information of the property you are purchasing, because it is available to the general public.

Does the general public determine the property qualifies for the loan?

 

[Huds_Harm]

When you signed the contract with the parcel number, address. Legal description, etc.. you as the buyer have access to the public information of the property you are purchasing, because it is available to the general public.

So is that a yes she did have a duty to disclose.?

 

[shrubberyvaluation]

Does the general public determine the property qualifies for the loan?

No the lender does.

 

[shrubberyvaluation]

So is that a yes she did have a duty to disclose.?

You take everything else to fit your narrative rather than the truth, so why not.

 

[George Hatch]

House next door just sold for $425,000 but is newer, brick, 3 car garage, etc. same bayou

A little different fact pattern. According to the description it looks like that property has a well and septic, too. Being newer shows that the county was still allowing 20 years after the OPs home was developed.

With this larger/newer property it looks like the topo includes a level terrace above the flood plain area in the rear, with pics in the listing showing retaining walls for about 40ft behind the structure. The rest of the parcel extends into the flood plain and all the way into the centerline of the creek itself. So maybe the septic install is located further from the structure, or maybe they installed it in the front.

Besides, the question we'd want to ask is about the financing itself. I don't know how anyone does that in TX without calling brokers and asking. There are properties located on both sides of that waterway. A 5yr check on the listing history would reveal whether brokers were warning about septic systems or not. That's how a local appraiser would normally get clued into asking about those specifics, if they're seeing it being mentioned in the MLS listings.

If an atty can demonstrate that FHA was or wasn't adhering to the location element of their MPR then there would be no need to assume what they would have done in this situation. For all we know, when FHA responded it wasn't their problem that may be the result of them knowing from their own conduct in the past in that area that they weren't enforcing that element of their own policy. Or not - maybe they have been scrupulous about their MPRs in this situation and their position is that the borrower had no right to assume FHA would have protected her from her own decision making.