First, it is gratifying to know you are actually reading what we write and release. We know this is true because a little over a year ago, we received very few questions about subpoenas and today, after writing a little warning piece on the now infamous FDIC subpoenas being issued to appraisers by a private law firm, we get lots of questions. In fact, we get so many we decided to put together a short follow-up piece on different kinds of subpoenas and how to handle them. These are presented in ascending order of concern with the final one being...
“I was just asked by an AMC to get a background check. Do I have to comply?” As risk management advisors for Appraisers and Inspectors, this is one of the questions we hear over and over again. Let’s face it — appraisal fees are lower than ever before. Essentially, AMCs are asking you to do the same amount of work for less pay. In some cases, they’re even asking you to do more work. Does it make sense then that you have to get a background check in order to work for a specific AMC? Unfortunately, the increased costs associated...
My money is definitely on another financial crisis I recently read a summary of an interview of James Gorman, CEO of Morgan Stanley. When Gorman was asked about the chances of another financial crisis like the one we had 5 years ago occurring, he replied that “the probability of it happening again in our lifetime is as close to zero as I could imagine”. To this statement, my reply is quite simply “bull—-!” Here are the reasons why another financial crisis can happen in the next few years. Government and personal debt remain at unsustainable levels. The US budget is...
We often receive calls from appraisers who have been blacklisted by a lender they do no direct appraisal work for. Typically, the story is the same. They are being dropped from an AMC panel that has given them a lot of business because the AMC found out one of the bigger secondary market loan buyers/lenders has blacklisted the appraiser. This is a lender they do not work for and/or haven’t done any work for in years. The blacklisting is based on some alleged issue with an appraisal done for another client and usually involves a review of the old appraisal...
According to the Appraisal Institute’s recently published 2013 Real Estate Appraisal Outlook, U.S. appraisers anticipate that litigation valuation/forensic appraisals will be one of the top five areas of growth in the next one to two years in both commercial and residential appraisal. Indeed, approximately 33% of surveyed commercial appraisers anticipate more demand from law firms and lawyers in the near future, with 24% of those surveyed expecting an increase in valuation consultation and studies in support of litigation. The appraisers’ prediction may be spot on the money as at least one U.S. municipality has begun to implement a plan to...
With appraisers being asked to do more work for the same amount of money and with lawsuits against appraisers being more prevalent today than ever before, it is increasingly important for real estate appraisers to check and double check the data they use when preparing a report. Since many appraisers are still feeling the economic impact of the real estate downturn on their bottom line, more and more are looking to reduce the cost of the data they use. While this may seem to be a simple and sound economic decision, it can lead to some serious negative consequences. USPAP...
As a risk management firm which has been serving real estate appraisers for over 20 years, we are in a relatively unique position in terms of offering suggestions how to improve the current residential real estate appraisal process. To offer some perspective, during our history we have had close to 20,000 appraisers as members of our risk management family and we have been actively involved in the resolution of close to 2000 claims brought against appraisers, both inside and outside of the courtroom. Furthermore, our management team has been around long enough to witness not only the most recent collapse...
The implosion of the real estate bubble reverberated across the American landscape. Neither residential nor commercial markets were spared. This implosion not only had a very palpable effect on the economy, but on the political debate of this nation as well. That political debate—as it seems is often the case—has turned to finger-pointing. Those fingers have now curled up into a fist, and that fist is now knocking on the doors of appraisers across the country. In the aftermath of the economic downturn, many banks were taken over by the Federal Deposit Insurance Corporation (FDIC) after their balance sheets dived...
ESA Bankruptcy, Is Chase to Blame or a Victim? I find myself offering thoughts about many strange and unusual situations involving appraiser E&O and risk management in general, but today may be the strangest subject of all – why it appears Chase did nothing wrong in the ESA bankruptcy case. Don’t misunderstand this as meaning I like Chase in the slightest. I strongly disapprove of what Chase has done and continues to do to appraisers using blacklisting, strong-arming, and filing state licensing complaints to force its will on the appraisal profession. I find much of what Chase has done as...
New tactic by the NAR and NAHB to get appraisers to “play ball” CNN Money recently published a piece (located here) titled “Home appraisals no longer derailing sales”, a quote generically attributed to members of the National Association of Realtors (NAR). What struck me as a bit odd was the fact that just about a year ago, the NAR in conjunction with the National Association of Home Builders (NAHB) stated in another article on home sales and appraisals that roughly 1/3 of the deals placed into contract by its realtor members were failing to close due to problems getting appraisers...
