Author: Peter Christensen

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FDIC Suffers Setback Against LSI

The FDIC Suffers a Setback in Case Against Lender Processing Services and LSI Appraisal As reported in prior posts, the FDIC, as receiver for failed lender Washington Mutual, sued appraisal management company LSI Appraisal and its corporate parent Lender Processing Services for breach of contract and gross negligence on May 9, 2011 (see post here), and on July 22, LSI and LPS filed a motion to dismiss. In that motion, LSI argued that the FDIC’s gross negligence claim should be dimissed based on the economic loss rule, that the FDIC’s alter ego claims against LSI’s affiliated corporate entities (including LPS)...

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Update on FDIC v. CLGX (CoreLogic – eAppraiseIT):

FDIC’s lawsuit against CoreLogic – eAppraiseIT… FDIC Reiterates Threat that Appraisers Are the Legal Agents of AMCs in a Late – Filed Brief CoreLogic, parent of the AMC formerly known as eAppraiseIT…The FDIC is now contending that independent contractor appraisers are the legal agents of appraisal management companies (AMCs) in both of its cases against LSI Appraisal and CoreLogic. Based on this contention, the FDIC asserts that the AMCs should be liable for all damages attributable to the alleged negligence of their panel appraisers. The FDIC first asserted this argument in a brief filed in its case against Lender Processing...

What's Wrong with Most Indemnification Clauses in AMC Contractor Agreements 2

What’s Wrong with Most Indemnification Clauses in AMC Contractor Agreements?

Objectionable indemnification clauses purport to shift 100% of the liability to individual appraisers… AMC independent contractor agreements are now receiving more attention. A key issue that many appraisers and regulators have focused on is that many AMC contractor agreements use very one-sided indemnification clauses to attempt to shift financial liability for the appraisals the AMCs manage to individual appraisers. NAR recently wrote to federal regulators expressing serious concern that such AMC clauses are interfering with appraiser independence and hurting appraisal accuracy and quality — i.e, if appraisers fear being sacked with unbearable liability based on an appraisal later being deemed...

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