HOW IS RESPONSIBLE WHEN YOU PURCHASE A PROPERTY AS IS? WHEN THEY DIDN'T DISCLOUSE ADDITIONS WITHOUT PERMITS? AND CITY IS INVOLVE ALREADY.

In California there is a statutory duty to disclose all information on the statutory form AND a separate duty that is specifically preserved in the statute to disclose all information known to the sellers that materially affects the value and desireability of the property.    The statute and the case law interpreting it basically have elminated any meaning to "as is" in residential real estate purchases.  So you don't need to worry about that.  The failure to disclose gives you the right to sue the seller of the property.  What is confusing to me and it seems to you is who is the seller of the property.  It is not clear what the bank was doing involved in the sale.  If the borrowers were the people who actually signed all the paperwork for the sale, though, they are the primary defendants you would sue.  You may be able to sue the bank too, but I would need more facts to evaluate that.  If you would like a free half-hour consultation, please feel free to give me a call and we will set up a time for a telephone conference.  This site has had problems with links to my firm profile but you can find us listed under Libris Solutions in Walnut Creek, CA in yellowpages.com.

I don't think the bank has any liability here.  I think you need to sue the people who sold you the house.

I can't be sure you'll succeed, of course.  If there's a written disclosure statement, and the way it is worded will support an argument that one or more questions were answered falsely, you have a better case.

Ordinarily, legal fraud is based on something the defendant actually says to the other side (whether verbally or in writing).  However, in some cases like this, where there is a serious and known problem that cannot be found by an ordinary and reasonable inspection (and I think there's a good chance this qualifies), some courts will impose a duty to disclose, or a "duty to speak," and provide the same relief as if an outright lie had actually been said.