Have You Been Blacklisted by Lender?

Brian L. Trotrier

Brian L. Trotrier

Executive Vice President and Chief Operating Officer at FREA
A former practicing attorney with more than 30 years experience in real estate and risk management. The Foundation of Real Estate Associates (FREA) has specialized in providing Errors & Omissions Insurance to appraisers and home inspectors since 1993. As a membership organization with over 6,000 members, FREA is one of the largest and most well respected professional associations in the country, providing E&O Insurance for appraisers and inspectors as well as educational opportunities, member benefits, and legal support.
Brian L. Trotrier

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Have you been blacklisted by a lender

We often receive calls from appraisers who have been blacklisted by a lender they do no direct appraisal work for.

Typically, the story is the same. They are being dropped from an AMC panel that has given them a lot of business because the AMC found out one of the bigger secondary market loan buyers/lenders has blacklisted the appraiser. This is a lender they do not work for and/or haven’t done any work for in years. The blacklisting is based on some alleged issue with an appraisal done for another client and usually involves a review of the old appraisal by staff from the lender issuing the blacklist notice. Because the AMC fears a new appraisal done today for any lender might someday end up being sold to the lender that issued the blacklist, the AMC just drops the appraiser to avoid the potential problem.

Many times the alleged appraisal defects found by the reviewer are rebuttable, but neither the lender doing the blacklisting nor the AMC removing the appraiser from its panel are really interested in trying to get to the real truth so the appraiser just gets dropped by the AMC and the lender’s blacklist keeps getting circulated.

This is obviously an injustice, but how can an appraiser fight back and clear his or her name and reputation? Here are what we believe to be the options you have:

  1. File a complaint with the state agency regulating AMCs against the AMC dropping you. We believe an AMC has a duty to investigate the issue independently and not to just take the easy way out by dropping you from the panel. We also believe the AMC could simply filter your assignments to avoid you doing any work for the lender that issued the blacklist. Since the government blessed the AMC system as a way to protect appraiser independence, we believe the AMC has a duty to do more than just drop you from the panel even when it may cost the AMC some time/money to resolve the issues. File a complaint against the lender that blacklisted you.
  2. Call the Appraisal Subcommittee’s hotline (877-739-0096) and ask them where and how to file a complaint against the lender that blacklisted you and never gave any reason for doing so. In many cases this will be the Office of the Comptroller of the Currency, but call the ASC and ask to be sure.
  3. Get out your checkbook and hire an attorney to write a letter threatening to sue both the AMC and the lender. The principal argument being that the actions of the lender doing the blacklisting and the AMC following it blindly are damaging your business and reputation and are intentional acts with serious consequences. The lender lobbed out the blacklist announcement without hearing your side of the story and the AMC swallowed it without questioning the lender in any way.
  4. Last, but not least, call or write your elected officials at both the state and federal levels. Unless appraisers speak up loudly, clearly, and often, then elected officials assume the system is working fine. Let them know it is not working and needs to be fixed.
Brian L. Trotrier

Brian L. Trotrier

A former practicing attorney with more than 30 years experience in real estate and risk management. The Foundation of Real Estate Associates (FREA) has specialized in providing Errors & Omissions Insurance to appraisers and home inspectors since 1993. As a membership organization with over 6,000 members, FREA is one of the largest and most well respected professional associations in the country, providing E&O Insurance for appraisers and inspectors as well as educational opportunities, member benefits, and legal support.

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4 Responses

  1. Barry Bates says:

    Finally some appraisers are banding together on this stuff; check out hellsappraisers.org

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  2. Retired Appraiser Retired Appraiser says:

    Appraisers should be so lucky as to be blacklisted by an AMC.

    If you are smart you’ve blacklisted yourself from every list and left the business for all of eternity.

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  3. Jeremy Hall Appraisals - Colorado Jeremy Hall Appraisals - Colorado says:

    This story only captures half the story though. There surely is a blacklist floating around for appraisers who have demanded fair fees and refused improper engagement. The very act of secretive and shared blacklists is an affront to appraiser integrity. If these lenders and amc’s have do not use lists, they should publish them and be able to back the results. Occasionally they are found by appraiser researchers and posted on various web sites. The lenders or whomever promptly throws a fit and has the links or data removed. What about an appraiser who is blacklisted for refusing engagements without ever completing an order? That’s probably the most common type of blacklisting; refusal to play ball.

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    • Jeremy, I have a list of over 10,000 appraisers that have been blacklisted (from a ‘friendly’ AMC). It goes back a LONG way. I wanted to publish it so all could check for themselves but IF I did  so, then I could be incurring liability to these very same appraisers by republishing the list. Additionally, I don’t want to be a further source of introducing such a list to the public domain via online publishing.

      What I WILL do is give the list to any American Guild of Appraisers member ( http://www.appraisersguild.org )that asks me for it. It’s in an EXcel spreadsheet format. Only about 3,000 of the over 10,000 appraisers were reportedly added in the past ten years.

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