Charles Evans Whittaker

“ When duly requested to do so by a qualified lender, the FHA, through its appraisal staff, makes an inspection of property offered for sale in order to determine whether the property is eligible for FHA mortgage insurance, and to assign an appraised value establishing the maximum amount of mortgage insurance obtainable. ”

“ After negotiations extending over the period of a month, in the course of which respondents were advised by the sellers that the property had been appraised by the FHA at a value of $22,750 for mortgage insurance purposes, respondents entered into a conditional contract to purchase the property at a price of $24,000. The contract was conditioned upon the respondents' obtaining a loan secured by an FHA-insured mortgage in the amount of $18,000. ”

“ Since § 226 of the National Housing Act [14] requires that a seller of property approved for FHA mortgage insurance 'shall agree to deliver, prior to the sale of the property, to the person purchasing such (property) , a written statement setting forth the amount of the (FHA) appraised value * * *,' the Fourth Circuit reasoned that the FHA appraisal procedure was designed to protect prospective home purchasers; that the Government (through the FHA) therefore 'owed a specific duty' to respondents to make a careful appraisal ”

“ In practically all such instances, it may be said that the Government owes a 'specific duty' to obtain and communicate information carefully, less the intended recipient be misled to his financial harm. ”

“ Prosser, Torts, 734, 737 (1941 ed.) ; Bohlen, Should Negligent Misrepresentations Be Treated as Negligence or Fraud? 18 Va.L.Rev. 703, 708 (1932) . Glanzer has been followed a in number of States which have broken from the earlier, virtually unanimous, American view subscribing to the English case of Derry v. Peek, L.R. 14 App.Cas. 337, 58 L.J.Rep.Ch. 864 (1889) (refusing to allow recovery for negligent misrepresentation) . See cases cited in 1 Harper and James, Torts 546, n. 5 (1956) . Cf. Ultramares Corp. v. ”