Legal Question in Real Estate Law in California

No. The lender's inspector had no obligation to you and neither does your lender. The lender's inspector is only answerable to the lender. You should have had your own inspection. If you used a licensed real estate agent, you should have received a wood destroying organisms report at the time of the purchase escrow. If you did not, you may have recourse against both agents involved and the seller.

I doubt that you'd be successful suing the lender if you neither requested the inspections or paid for them. This is based upon the concept that the inspector is in contract with the lender and therefore owes the duty to do a competent job only to the lender, and to report his findings only to the lender. I would encourage you to visit with a local lawyer, to whom you can show your documentation and with whom you can discuss whether you might have standing as a third-party beneficiary of the contract between the lender and its inspector, but it's likely the local lawyer will also doubt your chances of prevailing. Also, there may be questions about whether an inspection three years ago would have discovered or predicted the problems seen today.

I agree with Mr. McCormick. Additionally I think that you should have noticed termites while living in a home long before any inspector did on a refinance.