Ordinarily, the seller would most likely be liable for failing to disclose the violation.  This, however, was a foreclosure and the lender said that they didn't know about it.  I think this buyer will have recourse against the seller/lender because the servicer had notice, and the servicer is the lender's agent. 

Perhaps the Realtors should be looking into these matters - especially if they are selling REO property.

Best,
Robert A. Franco
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