The monetary risk, however, may be much bigger for hybrid AMCs… company’s vendor panelists should be classified as employees, rather than contractors, plaintiff’s counsel offered evidence that the company “tells vendors where to go, when to go, what to do, when to get it done and how much and when they will be paid for their efforts…” Appraisal Firms and Hybrid AMCs: Beware of the Dynamex Decision and Its Impact on Classifying Appraisers as Independent Contractors in California Classifying “staff appraisers” as independent contractors, rather than as employees, is a very common business practice among real estate appraisal firms. It...
A residential staff appraiser has filed an overtime class action lawsuit against appraisal management company CoreLogic Valuation Solutions. The appraiser is a current employee and works as a staff appraiser in Southern California. On behalf of herself and a putative class of similar CoreLogic staff appraisers, she alleges that CoreLogic’s compensation practices violate the overtime pay requirements of the federal Fair Labor Standards Act and California state labor laws. The case will be legally interesting to watch because CoreLogic allegedly pays its employee appraisers on a “piece work” per appraisal basis with additional compensation for based on production and other...
Classifying Appraisers as Independent Contractors – an Issue for Appraisal Firms and Maybe AMCs Too A hot legal issue that is beginning to more often affect appraisal firms and similar businesses, such as inspection and field service management firms, is the classification of workers as independent contractors, rather than as employees. In some lawsuits, plaintiff workers argue that they were improperly classified by firms as independent contractors and then claim that, if they had been treated properly as employees, they would have been entitled to compensation for overtime, as well as reimbursement for expenses. In other situations, the issue is a...
Discovery of Draft Expert Witness Reports (Draft Appraisals) in State Court – a Chart Appraiser Michael Brunson, SRA, MNAA, and I recently wrote an article for the Appraisal Institute‘s 4th Quarter 2015 edition of Valuation entitled “Getting Ready for Expert Witness Work: 10 Practice Pointers.” One of the pointers is that while the Federal Rules of Civil Procedure (Rule 26) now generally protect a retained expert witness’s draft reports (e.g., draft appraisals) from discovery by the opposing party, appraisers need to understand that if a litigation is pending in state court and thus subject to the state’s rules of civil...
Llano cases against appraisers The mass litigation against appraisers fueled by Impac Mortgage/First Mutual Group/Llano/Savant is definitely consuming too much of this blog’s space. I will in the future likely create a special home just for their coverage — because their legal and economic assault on appraisers could cause profound harm for U.S. appraisers if unchecked. Until that separate place exists, here is another update: “This is literally a nightmare for me and I am literally shaking as I write this reply.” Those are the words of First Mutual Group and Llano Financing’s own attorney Henry Portner to describe the predicament he is in...
In our world of claims involving appraisers, we quite often see different versions of this same story — in this version of the story, an appraiser did a review appraisal that was used by Savant LG in a currently pending case against another appraiser in Florida. Just months later, that appraiser found himself named as a defendant in a lawsuit filed…
The grand scheme of suing appraisers! Who Is Llano Financing Group? Who Is Carrington Capital Management? Why Are They Suing So Many Appraisers? Short Summary Update 8-17-15: Hundreds of appraisers are being sued by two entities that invest in suing appraisers for profit. At this time, the entity filing the most lawsuits against appraisers is Llano Financing Group, and most of the appraisals it is suing over were held by Impac Funding/Impac Mortgage. Impac is expressly assigning its claims and rights to sue appraisers to the investors (according to the court complaints). In the last three months, the investors have sued about 280 appraisers...
Set Your Limits and Protect Yourself with a Limitation of Liability Clause In a recent case on the West Coast, a certified general appraiser was sued for professional negligence by a commercial lender. The lender had made a high-interest, short-term loan to an investor/developer for the purchase of a large parcel of land that the borrower planned to subdivide and sell as mini-ranches. The property was appraised for approximately $5 million in 2007, and the lender had loaned $3.2 million. Within months after closing, the borrower’s project began sputtering because of the financial crisis, and by early 2009, the borrower was in default. The property sold at...
Many residential appraisers we insure and several appraiser organizations have contacted us in the last few days about an appraisal management company’s new requirement that their panel appraisers upload a PDF copy of their appraisal workfile for each assignment they perform. The AMC is LenderVend, LLC and, according to its website, it is affiliated with mortgage lender Provident Funding. We understand that LenderVend’s requirement imposes an additional burden on appraisers. We’ve also heard firsthand from appraisers about the anxiety the policy is creating because of the unknown uses to which the workfile may be put by the AMC. As is the case with any peculiar...
A consumer class action complaint has been filed against a lender and its AMC relating to the subject matter of a prior CFPB investigation and settlement. Last August, the Consumer Financial Protection Bureau (CFPB) announced that it had taken action against Amerisave Mortgage Corporation, its affiliated AMC Novo Appraisal Management Company, and one of the owners of both companies Patrick Markert. Part of the CFPB’s action concerned alleged overcharging for appraisal services by the AMC and failure to disclose the AMC’s affiliation with the lender. Under a consent order, Amerisave and Novo agreed to pay $14.8 million in refunds to consumers and a $4.5 million...
