Category: E&O

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FDIC Sues 29 Appraisers Over Loans By Downey Savings

In the two weeks leading up to Thanksgiving Day, the FDIC sued 29 more individual residential appraisers. All of the appraisers sued in this round reside in California. The FDIC’s complaints against them uniformly allege that the appraisers were professionally negligent by overappraising the value of properties securing loans by failed Downey Savings in 2004-2007. The average claim against each appraiser is for approximately $350,000. The complaints concern both origination and review appraisals. One of the recently sued appraisers has now been sued twice by the FDIC. This is the third appraiser to be sued twice by the FDIC. Another...

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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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