Category: E&O

Seven Cases the Defendant Appraisers Won Based on Expiration of the Statute of Limitations 0

Seven Cases the Defendant Appraisers Won Based on Expiration of the Statute of Limitations

I am biased in favor of defendant appraisers. I always root for the defense, even if it’s one appraiser suing another appraiser (as in one case below). Defense is our business. Here, are seven cases where the defendant appraisers won based on a statute of limitations defense. That means even if there was something wrong with the appraisal at issue, the defense counsel still won the case. So, you have to give the credit to the defense counsel. That’s not to say there really was a problem with the appraisal in each case below — it just didn’t matter if...

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Who Has Been Suing the Most Appraisers? Two Names You Know. Two Names You’ve Probably Never Heard.

These are four of the parties who have been suing the most appraisers in 2011-12. I suspect most appraisers won’t recognize two of the names, unless the appraisers are defendants in one of their cases. The parties are in no particular order, but the last one does file the most lawsuits. LSF6 Mercury REO Investments This is an investment fund of a private equity company named Lone Star. LSF6 bought discounted mortgage debt from bankrupt CIT Group in 2008. In late 2011, LSF6 began suing appraisers in New York as part of what appears to be an experiment with mass...

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FDIC Diversifies Its Appraiser Targets in Recent Lawsuits

In the last three months, since May 1, 2012, the Federal Deposit Insurance Corporation (FDIC) has sued 45 individual appraisers and appraisal firms in its capacity as receiver for one of the failed banks or lending institutions under its supervision. The appraisers targeted by the FDIC in its recent cases are a more diverse group, geographically and professionally, than in earlier cases, but in other respects the FDIC’s recent cases represent more of the same familiar story — suing appraisers to recover money damages for allegedly appraising properties too high for loans extended during the peak of the real estate...

West Virginia Riskiest State for Appraisers 2

West Virginia Riskiest State for Appraisers

West Virginia has been among the riskiest states in which to be a residential appraiser for several years. It’s my educated guess that a residential appraiser is more likely to be sued in West Virginia than in any other state. A plaintiffs’ law firm has elevated that level of risk to a nightmare for one particular AMC and its panel appraisers in West Virginia who performed appraisals for certain loans by the AMC’s primary client.

At the end of June, the law firm filed an alleged class action on behalf of residential borrowers residing in West Virginia against Title Source, Inc., which operates TSI Appraisal; Quicken Loans, which is the AMC’s corporate affiliate and primary client; two of the AMC’s panel appraisers; and all other appraisers

Should I Attach My E&O Declarations Page to My Appraisal Report? 2

Should I Attach My E&O Declarations Page to My Appraisal Report?

Attaching E&O Information to Reports Because some AMCs still wrongheadedly insist that appraisers do it, we are asked this question a lot: “should I attach my E&O declarations page to my appraisal report?” The answer is always the same: it’s a bad idea. It’s bad for both the appraiser and the client/AMC. It is perfectly reasonable for a client or an AMC to ask for proof of E&O insurance and ask to receive updated insurance information each year. That’s common to many professions, but there is no good reason to require that the information be included within or attached to...

Statement of Frank Gregoire (NAR) Before Appraisal Oversight Hearing 3

Statement of Frank Gregoire (NAR) Before Appraisal Oversight Hearing

NAR believes that lenders should be prohibited from retaining the services of an AMC where the lender maintains any level of ownership. Frank Gregoire‘s written testimony to the United States House of Representatives Committee on Financial Services Subcommittee on Insurance, Housing and Community Opportunity before the Appraisal Oversight Hearing … APPRAISAL ISSUES AND CHALLENGES There are a myriad of circumstances and issues working to hinder the recovery of the nation’s housing market. Among them, and often overlooked, are those related to the credible valuation of real property. A credible valuation provided by a licensed or certified professional 1) ensures the...

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The Mysterious “Notice of Claim” to Appraisers Relating to FDIC Lawsuits

This post is for appraisers who have received a document entitled “Notice of Claim — Appraiser” relating to lawsuits filed by the FDIC (see example below). We have received multiple reports from appraisers and defense counsel about the mysterious “Notice of Claim.” The notices are so far nearly identical and state that the FDIC has filed a lawsuit for damages against one of two AMCS (either CoreLogic-eAppraiseIT or LSI Appraisal) based on one or more of the recipient appraiser’s appraisals and that the appraiser may be the subject of claims for negligence by one of those AMCs or by another...

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What is the FDIC Suing Appraisers About? Some Examples of the FDIC’s Specific Allegations?

The FDIC continues to sue residential appraisers in connection with origination appraisals and review appraisals performed for failed lenders between 2003-2009 on loans now in default. It may be helpful, or scary, for appraisers and AMCs to see for themselves exactly what kinds of alleged USPAP violations or other errors the FDIC is claiming in lawsuits against appraisers. Therefore, I have copied below the FDIC’s actual allegations against several appraisers. These are word-for-word the entirety of the FDIC’s claimed errors against these appraiser defendants. Please don’t shoot the messenger. I’m a lawyer, not a USPAP expert, but even I know...

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The 8 Biggest Appraiser Liability Cases in the U.S.

I have described below the 8 biggest appraiser liability cases with which I am familiar that are currently pending in the U.S. These are cases that specifically name appraisers, appraisal firms or appraisal management companies as defendants. That’s an important distinction because the appraisal industry has been fortunate that only a small fraction of litigation about financial losses blamed on appraisal deficiencies actually names any appraisal defendants. Yet, the stakes below are very significant for the appraisal industry because the realistic measure of damages at issue in just these 8 cases — not the plaintiffs’ puffed-up alleged damages — is...

AMC’s Filing Complaints Against Appraisers 0

A Refreshed Warning about Some Risky E&O Sold to Appraisers

We first warned appraisers about this problem almost a year ago, but many appraisers are still falling prey to the marketing for some “no frills” E&O insurance policies and their lack of coverage. Advertisements for this product appear in some respectable newsletters and publications. Fortunately, others have taken steps to protect their members and readers by providing information, e.g., the Appraisers Coalition of Washington published a warning for its members in April last year on the ACOW website and Ann O’Rourke also published a warning last year in her popular Appraisal Today newsletter. The central problem is what might be...

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