FDIC Diversifies Its Appraiser Targets
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 bubble which are now in default.
Here are the facts regarding the FDIC’s recent cases against appraisers:
- The defendant appraisers in the FDIC’s lawsuits since May 1, 2012 reside in the following states: CA, FL, IL, MI, MN, NC, NJ, NY, SC and WA.
- Four of the appraisals at issue relate to commercial or development properties.
- All of the appraisals at issue were performed in 2004 through 2008.
- All of the claims by the FDIC allege that the defendant appraisers were too high in their opinions of value.
- Several of the appraisers recently sued may not have E&O insurance coverage for the damages demanded by the FDIC because they either now have an E&O insurance policy with an FDIC exclusion (or “regulatory agency” exclusion) or have no insurance covering their prior appraisal work.
Examples of some of the FDIC’s recent cases filings are available on Appraiser Law here.
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