Quit Doing This. Just Say NO!

Dave Towne

Dave Towne

Certified Residential RE Appraiser at Towne Appraisals
AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com
Dave Towne

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E&O Binder Page in Appraisal Reports: Just Say No

E&O coverage has nothing at all to do with underwriting mortgage loans…

Do not include your E&O binder page in any appraisal report. Period. End of story. Especially if you are being ‘managed’ by an AMC who has that in their engagement agreement, claiming it’s a lender requirement.

A while ago, I received a “correction notice” via a prominent AMC for a report I submitted:

Per lender requirements, evidence of E&O coverage must be included in the report.”

My response to the AMC directly via email, not in the report, was this:

“To: AMC rep

Is there any way you can get this ‘correction notice’ rescinded?

If not, the lender may not like my response in the report, because I don’t do that for any client, lender, AMC, or whomever – EVER. There is notice of this in the report Supplemental Addendum, which of course, nobody bothers to read.

Secondly, when a lender engages the use of an AMC to ‘manage’ the appraiser panel, it is the AMC’s responsibility under federal lending regulations to monitor, vet and approve appraisers, which includes requiring appraisers to supply necessary documents (such as E&O binders) to the AMC in ADVANCE OF RECEIVING ASSIGNMENTS.

Third, E&O coverage has nothing at all to do with underwriting mortgage loans.

Fourth, if a lender has issues with my reports on other respects, they can work back through (AMC) for resolution, or contact me directly. If they want to sue me, they can send the appropriate docs, which I will then give to my E&O provider.

Therefore, there is no real reason for an appraiser to include such docs in the actual report.

It really ticks me off that (AMC) won’t stand up to this nonsense with lender clients.”

Within a few minutes, I received an email back from the AMC person:

I took care of it Dave, that revision request should be dead and buried. It’s a simple enough fix, I just need to get involved to get rid of it.

There’s actually a FIFTH reason you should not include your E&O info in reports: borrowers have no need to know who your insurance provider is. All borrowers now get a copy of your report prior to closing their loan.

So…again, quit doing this. Just say NO.

Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser – Licensed in WA State since 2003.
Dave Towne on e-AppraisersDirectory.com

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11 Responses

  1. Baggins Baggins says:

    Errors & Omissions only covers just that, the amount of financial impact that an appraisers error of data or omission of data might have caused.  It does not indemnify a loss, cover private owner or lenders claims for most considerations, and does not act like any form of normal homeowners insurance substitute.  So if I appraise a million dollar home and error in 5%, that’s what EO covers, nothing more, nothing less.

    The repeated requests from amc’s to include this information is perhaps the most apparent illustration of their lack of relevant experience and expertise related to real property valuation development.

    My new anti amc tag line is that regardless of what college educated expert in non related fields an amc may hire, they will never make acceptable substitutes for people whom actively maintain real estate sales, brokerage, or appraisal licensing.  The barriers to entry into this industry remain absurdly low for the emerging group of possibly the most influential people, the unlicensed amc managers.

    In an unrelated but quite interesting note;  CO technical rules on lending and MJ.



  2. Xpert says:

    Put something similar in every report and be done with this stupid stip: a copy of the appraiser’s E&O certificate is on file with the AMC. The E&O provider does not allow the certification to be provided to non-intended users.


  3. Carl says:

    Agreed. Quit being a pushover and learn to say no.


  4. Jason says:

    Pre AMC we never had to include our licenses and never our E&O info. If you include your E&O policies in your reports, do so at your own peril.


  5. Bill Johnson says:

    Next time you go to the doctors office ask the two nurses who help you for their insurance information. Hell, just ask the doctor, the nurses, the lab technicians, the pharmacists, and the hospital administrator for their insurance paperwork. Papers, need papers.


  6. Jack Of All Trades says:

    Just one of the many, many problems with this profession.


  7. What an occupation this is! None of us should have to be told to refuse to include E&O information in our appraisal reports. That in my opinion also goes for allowing background checks. Yes, I know that each of us work in a different area and not all areas are alike.

    An example: Had a report due on 18th. and it was turned in today (20th). Lender sending standard bullshirt “late” notices, with reminder that late delivery could adversely impact future assignments…yappity, yap! (this was late because the home had been vandalized with front door stolen as well as most other stuff) And I do not care!

    At the same time the above is happening, the same client is sending me a new request for an appraisal with a ten day turn time. I quoted back 12 days and they accepted. Both of these are at $450.00 each. This is a large credit union and a good client. Sometimes this breakdown in communication is just too much! I most certainly admit that I am too old and grey to put up with the bull dished out by AMCs. It does not take me 12 days to do a residential assignment. That is in addition to all the rest ahead of it. Honestly, we must receive at least 2 – 3 assignment requests each week from various AMCs wanting a price and turn time on a local assignment. I have not accepted an assignment from an AMC in well over 5 years. I am not signed up with any of them.

    The purpose of my rant is not to brag about my business. My purpose is just to ask why in the world with appraisers dropping out of this occupation at over 200 per month are so many of my fellow appraisers having to grovel to make a living? My opinion is that we have way too many parasites taking a bite out of our fee before it gets into our bowl!

    Do a google search of appraiser shortage. See who are the ones posting how serious the situation is! See who seems to have all the answers! you will notice that group of clowns are the folks who want to ride you (typical appraiser) like a rented mule! These are the ones that want your dues money, your subscription money, want to TEACH/COACH you! LOL   How stupid can we be?

    I saw today where the NAIFA and the ASA may be merging. That may be a sign of progress for our occupation. I had earned the IFAS designation but dropped out of NAIFA a few years ago. A heads up, this merger could show some real promise! If this group would just listen to some new ideas from some old folks…they could emerge as top cat!


    • Mike Ford Mike Ford says:

      I agree. ASA and NAIFA combined produce a stronger organization than the sum of the parts (imho).

      AGA has worked with both organizations and respects each. AI has real cause for concern.

      With it’s diversified disciplines and excellent educational offerings AND adherence to meaningfull standards, even when those standards may be ‘inconvenient’ for some members the ASA could take over the AI’s former national recognition for being a premiere appraisal organization.

      ASA has a track record of being on the right side of legislation affecting appraisers. Unlike the other organization that falsely ‘claims to speak for all appraisers’ in many of their public presentations.

      I’m seriously considering joining even as I continue to organize and work with the American Guild of Appraisers (AGA). I think there is still a need for both.


      • Wayne Courtney says:

        Mike, as always you have made some very good points. “The AI’s former national recognition for being a premiere appraisal organization”…In other words the AI has always said we B D BEST because we say we B D Best…Most of us totally know that is crap! The AI seems to jump in front of other groups to say that they represent the interests of appraisers. I am for sure one appraiser that they do not represent!

        I had earned my IFAS designation from the IFA. I have met the requirements to be an SRWA from the International Right of Way Association (another good group). Also an approved arbitrator by the TX Comptroller, GRI, SOARS, Approved to teach by TREC and TALCB.

        Honestly I would join the AGA but I will be 66 in July and I have very little fight in me. My schedule is June trip to Las Vegas, July cruise to Alaska, July trip to Las Vegas, July cruise to Bahamas, October cruise to Jamaica, Belize, etc. I did say that I was semi-retired. All I want is a couple of $450. assignments each week or so and I may be able to do my bucket list visit of the Figi Islands! Wish me luck! I sure do wish all of my fellow appraisers the best!

        I keep telling myself that I do not care what happens to the appraisal profession, but I really do care! It has been my life and my career. Maybe you would prefer to work and send some AMC dude to visit the Figi Islands…if so, pay their way! Lets work together and solve these problems!





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Quit Doing This. Just Say NO!

by Dave Towne time to read: 2 min