Author: Peter Christensen

Who Is Llano Financing Group? Who Is Carrington Capital Management? Why Are They Suing So Many Appraisers? - Imagecredit Flickr - Catherine Read 6

Why Are They Suing So Many Appraisers?

The grand scheme of suing appraisers! Who Is Llano Financing Group? Who Is Carrington Capital Management? Why Are They Suing So Many Appraisers? Short Summary Update 8-17-15: Hundreds of appraisers are being sued by two entities that invest in suing appraisers for profit.  At this time, the entity filing the most lawsuits against appraisers is Llano Financing Group, and most of the appraisals it is suing over were held by Impac Funding/Impac Mortgage.  Impac is expressly assigning its claims and rights to sue appraisers to the investors (according to the court complaints).  In the last three months, the investors have sued about 280 appraisers...

Protect Yourself with a Limitation of Liability Clause . Limitation of liability clauses are contractual provisions used to cap the liability of a party to a contract or transaction. - Imagecredit Flickr - Tax Credits 2

Protect Yourself with a Limitation of Liability Clause

Set Your Limits and Protect Yourself with a Limitation of Liability Clause In a recent case on the West Coast, a certified general appraiser was sued for professional negligence by a commercial lender. The lender had made a high-interest, short-term loan to an  investor/developer for the purchase of a large parcel of land that the borrower planned to subdivide and sell as mini-ranches. The property was appraised for approximately $5 million in 2007, and the lender had loaned $3.2 million. Within months after closing, the borrower’s project began sputtering because of the financial crisis, and by early 2009, the borrower was in default. The property sold at...

LenderVend Requirement For Appraisers to Upload Copies of Appraisal Workfiles - Imagecredit Flickr - GotCredit 23

LenderVend Requirement For Appraisers to Upload Copies of Appraisal Workfiles

Many residential appraisers we insure and several appraiser organizations have contacted us in the last few days about an appraisal management company’s new requirement that their panel appraisers upload a PDF copy of their appraisal workfile for each assignment they perform.  The AMC is LenderVend, LLC and, according to its website, it is affiliated with mortgage lender Provident Funding. We understand that LenderVend’s requirement imposes an additional burden on appraisers.  We’ve also heard firsthand from appraisers about the anxiety the policy is creating because of the unknown uses to which the workfile may be put by the AMC.  As is the case with any peculiar...

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Appraisal Management Company Sued in Consumer Class Action Complaint

A consumer class action complaint has been filed against a lender and its AMC relating to the subject matter of a prior CFPB investigation and settlement. Last August, the Consumer Financial Protection Bureau (CFPB) announced that it had taken action against Amerisave Mortgage Corporation, its affiliated AMC Novo Appraisal Management Company, and one of the owners of both companies Patrick Markert. Part of the CFPB’s action concerned alleged overcharging for appraisal services by the AMC and failure to disclose the AMC’s affiliation with the lender. Under a consent order, Amerisave and Novo agreed to pay $14.8 million in refunds to consumers and a $4.5 million...

Who are Mutual First, LLC and Savant Claims Management? Why is Mutual First Suing Appraisers? - Imagecredit Flickr - paurlan 2

Who are Mutual First, LLC and Savant Claims Management? Why is Mutual First Suing Appraisers?

Some appraisers are now being targeted in lawsuits by an entity named “Mutual First, LLC.” It has filed at least 35 lawsuits since May. Mutual First is not a bank, credit union or any kind of regular financial institution. It’s an entity aiming to make money for investors by suing appraisers. Based in Texas, it acquires foreclosed loans for small fractions of the original principal amounts. It then files lawsuits against the appraisers who performed appraisals years ago for the original lenders who made the loans. In its lawsuits, Mutual First claims that the appraisers are liable to Mutual First...

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CoStar Suing Appraisers for Copyright Violations

CoStar accuses the “John Does” of violating CoStar’s copyrights by contributing photos or other information obtained from CoStar to the CompStak database… In the last week, CoStar Realty Information has filed several lawsuits against commercial appraisers and real estate brokers for intentional copyright violations and fraud relating to the alleged use of CoStar property data and photos without proper registration/payment. If you use CoStar, be sure you are doing so properly and within the terms of your license agreement. Examples of the types of alleged situations that have led to CoStar’s recent and past copyright lawsuits are: (1) sharing IDs/passwords, (2) obtaining an...

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“Fake” Appraiser E&O Insurance and Shady Things from AMCs Too

Outright Fake E&O For many appraisers and also some AMCs (appraisal management companies), the only reason they purchase professional liability insurance (E&O) is because a client requires them to show coverage in order to receive work.  The fact that some appraisers and AMCs only look at insurance as an “E&O ticket” leads to some unfortunate examples of fraud, which appraisers, firms, AMCs and clients should be aware of. Before I get to the fakery, however, I’ll explain that our purpose in providing E&O, and also the reason that most of our insureds purchase it, is because E&O first serves the insured by providing...

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Class Action Lawsuit Filed Against BPO and AMC Firms for Allegedly Unpaid Fees

Unpaid BPO Fees Class Action On December 2, 2013, three law firms in Florida, Washington and Colorado teamed together to file a class action complaint on behalf of real estate agents and others allegedly owed unpaid fees for broker price opinions ordered by BrokerPriceOpinion.com. The complaint also names three-related companies First Valuation, LLC, First Valuation Services, LLC, and First Valuation Technology, LLC as defendants on the basis that they are “alter egos” of BrokerPriceOpinion.com and do not have true corporate separateness in their operation. The lawsuit was filed in federal court in Colorado, where the defendants are based. The named plaintiff in...

Regulatory Claims Exclusion 0

Regulatory Claims Exclusion

Navigators Sues More Appraisers to Deny Coverage under “Regulatory Claims” Exclusion Last Thursday, November 14, Navigators Insurance Company sued two more appraisers to enforce “regulatory claims” exclusions in the E&O policies they purchased. These appraisers are in Nevada. Like the appraiser sued by Navigators in Florida on November 6, the Nevada appraisers are being sued by the FDIC for professional negligence in cases filed about a year ago. The objective of Navigators’ lawsuits is to seek court confirmation of Navigators’ legal position that there is no coverage under Navigators’ policy for damages awarded against the appraisers to the FDIC, which is demanding about $500,000...

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Federal Court Rules on USPAP Confidentiality Issue in FDIC Lawsuit Against Appraisers in Colorado

On September 5, 2013, in a professional negligence case against two Colorado appraisers by the FDIC, a federal court ruled on an issue concerning USPAP confidentiality.  It was a simple issue, but it’s one of the very few court decisions relating to USPAP’s poorly written confidentiality rule (this previous post here explains why the rule is poorly written).  This is the rule: An appraiser must not disclose: (1) confidential information; or (2) assignment results to anyone other than: the client; persons specifically authorized by the client; state appraiser regulatory agencies; third parties as may be authorized by due process of law; or...

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