Chelsea.tajc, Home Owner in Gladstone, OR

Real estate lawyer suggestions for possible fraud and false representation by HUD?

Asked by Chelsea.tajc, Gladstone, OR Thu Jan 31, 2013

I purchased a HUD house last June. I know they are sold as is so I anticipated repairs after my inspection. However, now I have a leaky roof and nothing on the appraisal, property condition report, or inspection noted this issue. I recently discovered through neighbors, old google map images, and paperwork completed when the house was foreclosed upon (I had a title search done) that there was a tarp on the roof for over two years. The photos from the appraisal show no tarp and of course when I viewed the house there was no tarp. Yet nothing was said to me about someone removing it. The house was foreclosed in 2010 and a field service rep (for the bank I assume) sent out someone to document the property conditions and take photos (tarp present in photos). Yet nothing showed up in any of the reports or disclosures I received by HUD. From the title search HUD was given possession March of last year. Are they still liable for the house when the bank owned it? Do I have a case?

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Marvin Von R…, Agent, Tigard, OR
Fri Feb 1, 2013
I missed something when reading your initial post---you said " I know they are sold as is so I anticipated repairs after my inspection. "

I think you just shot yourself in the foot there, dude.
1 vote
I agree. when things are sold "as is," the repairs are all up to you. The tarp was probably to help with the leaky roof. If I were you, I'd put it back up until you can get around to repairing things officially.
Flag Sat Feb 21, 2015
The Stephen…, Agent, Portland, OR
Fri Feb 1, 2013
I'm sorry but I don't think you'll win this one. However it is best to talk with a lawyer.

I highly recommend:
Kate Brooke or Phillip Querin.
1 vote
Paul Johnston, Agent, Lake Oswego, OR
Thu Jan 31, 2013
Good luck with this one. HUD houses are totally as-is, you sign documents to that effect. The HUD docs encourage you to have in inspection and they also tell you that it's for your information only. As a government entity, HUD is probably immune from any liability, and t hey are totally exempt from Oregon disclosure law.. There may be other parties with some liability, like your home inspector. This is all above my pay grade, since I'm just a lowly real estate broker, but you're probably better off using your money and energy to fix the roof.

I deal with HUD homes all the time and the property condition reports are a joke. Your only defense is a good inspection. If you use FHA financing, you have to use their appraisal, which is also often a joke. I"m sorry to hear this story, and I wish you the best of luck.
1 vote
Myersjulie31, Home Buyer, Blakeslee, PA
Thu Dec 18, 2014
If you are having this issue with fraud, it is definitely a good idea to get a real estate lawyer. I think that if you are experiencing these problems with the roof and you weren't told about it, you should definitely get it taken care of. If you can find a good lawyer and talk to the previous owner, hopefully you can get it repaired. I think that you should definitely continue with this case so that you can get it all taken care of.…
0 votes
Gary Birtles, , Scottsdale, AZ
Thu Nov 20, 2014
I recommend looking at some online reviews. That is usually a safe way to get good recommendations. I also suggest setting up some consultation to see about your case. They'll be able to tell you if you have a case or not.
0 votes
Tom Whatley, Both Buyer And Seller, Fort Worth, TX
Thu May 16, 2013
I have a real problem with the defenses of HUD by many Realtors... My experience has been that they are also "in it for the money" and "don't want to bite the hand that feeds them"; "don't spoil the wine", etc. Why is this not a Conspiracy due to knowledge of "known" and Undisclosed damages? Deceptive Practices of Fraud & Concealment/Misrepresentation in addition to attempted Theft of a Purchaser's Earnest Money should be illegal. I have had this experience in trying to purchase a HUD home being Sold by a Listing Realtor:

1. Property Marketed by HUD and the Listing Realtor. They say "As Is"; I totally understand that
WITHIN Context. However, I believe any Reasonable & Prudent Person would consider
the "As Is" to represent what is KNOWN by both HUD, the Realtor and, DISCLOSED, "up to"
the Buyer's 10 day Inspection. If any additional damage is found by the Buyer's Inspection, the
Buyer should have the right to either Withdraw of renegotiate the Purchase Amount.

2. Initial Property Inspection. What appears to may have been massive water damage (possibly
Freeze Damage to the plumbing system), Buyer questions plumbing leaks. However, HUD
inspector says system pressure tested and NO leaks. (Falling belly insulation with water
marking plus fallen belly paper, NOT DISCLOSED in their PCR.) Buyers initially rely on HUD's,
an Realtor's, honesty and, THEIR PCR.

3. Bait & Switch? The Listing Realtor, AFTER the contract has been signed, the Realtor only
THEN produces a more detailed PCR with details NOT disclosed to the Public! Upfront Non-

4. When Buyer, under contract, raises questions about how ADDITONAL Repairs, including by
Thieves AFTER our Inspection could render the HOME with no value, Realtor then says HUD
considers the Value of the Home as minimal. Though the Home is "pushed" and little emphasis
given to Land, Value is really in the Land! It doesn't matter that HUD, and Realtor, put 99% of
Marketing and Price on the HOME. That really doesn't matter. They now state that the Home's
Value is Minimal so purchasing the Home (as Advertised) should not be considered even with
your being an Owner Occupant! Is this Legal or Ethical????

5. Further discussion of the Buyer's Rights are chiseled away at by the Realtor acting on behalf of
HUD. Says a HUD Contract is "one sided". It is your right, and responsibility, to obtain an
Independent Inspection within 10 days or forfeit that right. You should note that this property is
on a Supra Key box and we will NOT drive the distance to let you in and wait while your
inspection is done. HUD will make NO Repairs and since the copper wiring feed from the Meter
to the Interior Panel Box has been stolen, you are PROHIBITED from making that repair so the
Power can be turned on. So looks like you are Precluded from your right to that 10 Day
Inspection. Realtor Comment is made that HUD practices by the Golden Rule; "HUD has the
Gold and makes all the Rules!" Buyer has NO rights.

6. Buyer makes numerous calls to TREC Certified Inspectors who reportedly have the Supra Key
Cards for access. Everyone state they have NO Generator for testing the Electrical System.
Even the 3 referred by the Realtor. Everyone states the Power must be "turned on" for an
Inspection. Again, Realtor says HUD will NOT allow ANY repairs to assist in the
RECOMMENDED Buyer Inspection.

7, Realtor threatens that if Buyer has an Inspector use a Generator for the Inspection, if
ANYTHING goes wrong, Buyer will be held accountable for any, and ALL, property related
damages. (Remember, HUD used a Generator....)

8. Realtor says that, even though my Offer was based on what HUD set the value of the HOME
at, if thieves return to steal the HVAC, more wiring, interior fixtures, appliances, or even beat
holes in the walls, I am still responsible for those NEW damages by paying the ENTIRE Offer
Amt, and if I return for my final "walk thru", there will be NO Price Reduction; NO
EXCEPTIONS. At the very least, I will lose my Earnest Money for failure to complete the
Contract. That is MY problem and Loss.

Why is there NO accountability to HUD and/or their Partners in Non-Disclosure / Concealment????
0 votes
Tom Inglesby, Agent, Portland, OR
Sat Feb 16, 2013
It is pretty simple all HUD homes are sold as is, and that HUD does not have to give disclosures. Good luck to you. Tom Inglesby, Broker, RE/MAX Equity Group
0 votes
Michael McBa…, Agent, Portland, OR
Mon Feb 4, 2013
I am not a practicing attorney but I do have a law degree. Without question it is outside the scop of my license as a Real Estate Broker to offer any legal opinions or advice.

To get an opinion try

Michael McBarron
0 votes
Marvin Von R…, Agent, Tigard, OR
Fri Feb 1, 2013
First, we are not lawyers here (unless otherwise stated by someone who answers) but I believe several others are correct about the disclosures you signed. I have to take this back to the real estate agent you used. The agent should have known how HUD houses and the system in general works, and if possible should have told you to order a complete property inspection on your own. I dont know if thats possible because I dont sell HUD REO. At leasty he/she should have warned you about the possible 'as-is' . In general, when buying any foreclosure or REO one should expect a variety of physical and title problems.

Call the atty referral service in your area. My experienmnce for 33 yeras has been that many lawyers claim to be real estate specialists but few really are.
0 votes
Bill Eubanks, Agent, Oregon City, OR
Thu Jan 31, 2013
I have a couple of referral names of real estate attorneys that could easily answer the question for you. One is a local Gladstone person. HUD was the seller and contracted the inspections and condition reports. Any attempt at a liability claim would be made to them. I would first ask the advice of your real estate agent who represented you in this transaction? They cannot give any legal advice, but they are your best source to get you pointed in the right direction.
0 votes
Sales/ Admin, Other Pro, Portland, OR
Thu Jan 31, 2013
odds are you probably signed an as is disclosure when you closed or in your original contract- therefore they would not be liable-
0 votes
Adam Zagel, Agent, Clackamas, OR
Thu Jan 31, 2013
An attorney like Richard Mario at Buckley law offices would be your best approach.
0 votes
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