Quit Doing This. Just Say NO!

E&O Binder Page in Appraisal Reports: Just Say No

E&O coverage has nothing at all to do with underwriting mortgage loans…

Do not include your E&O binder page in any appraisal report. Period. End of story. Especially if you are being ‘managed’ by an AMC who has that in their engagement agreement, claiming it’s a lender requirement.

A while ago, I received a “correction notice” via a prominent AMC for a report I submitted:

Per lender requirements, evidence of E&O coverage must be included in the report.”

My response to the AMC directly via email, not in the report, was this:

“To: AMC rep

Is there any way you can get this ‘correction notice’ rescinded?

If not, the lender may not like my response in the report, because I don’t do that for any client, lender, AMC, or whomever – EVER. There is notice of this in the report Supplemental Addendum, which of course, nobody bothers to read.

Secondly, when a lender engages the use of an AMC to ‘manage’ the appraiser panel, it is the AMC’s responsibility under federal lending regulations to monitor, vet and approve appraisers, which includes requiring appraisers to supply necessary documents (such as E&O binders) to the AMC in ADVANCE OF RECEIVING ASSIGNMENTS.

Third, E&O coverage has nothing at all to do with underwriting mortgage loans.

Fourth, if a lender has issues with my reports on other respects, they can work back through (AMC) for resolution, or contact me directly. If they want to sue me, they can send the appropriate docs, which I will then give to my E&O provider.

Therefore, there is no real reason for an appraiser to include such docs in the actual report.

It really ticks me off that (AMC) won’t stand up to this nonsense with lender clients.”

Within a few minutes, I received an email back from the AMC person:

I took care of it Dave, that revision request should be dead and buried. It’s a simple enough fix, I just need to get involved to get rid of it.

There’s actually a FIFTH reason you should not include your E&O info in reports: borrowers have no need to know who your insurance provider is. All borrowers now get a copy of your report prior to closing their loan.

So… again, quit doing this. Just say NO.

Dave Towne
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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21 Responses

  1. Ross Grannan on Facebook Ross Grannan on Facebook says:

    I always say my E&O won’t allow it, so I never include it; ever and I have never gotten a kickback because of it.

  2. Joy Smith on Facebook Joy Smith on Facebook says:


  3. Baggins Baggins says:

    Errors & Omissions only covers just that, the amount of financial impact that an appraisers error of data or omission of data might have caused.  It does not indemnify a loss, cover private owner or lenders claims for most considerations, and does not act like any form of normal homeowners insurance substitute.  So if I appraise a million dollar home and error in 5%, that’s what EO covers, nothing more, nothing less.

    The repeated requests from amc’s to include this information is perhaps the most apparent illustration of their lack of relevant experience and expertise related to real property valuation development.

    My new anti amc tag line is that regardless of what college educated expert in non related fields an amc may hire, they will never make acceptable substitutes for people whom actively maintain real estate sales, brokerage, or appraisal licensing.  The barriers to entry into this industry remain absurdly low for the emerging group of possibly the most influential people, the unlicensed amc managers.

    In an unrelated but quite interesting note;  CO technical rules on lending and MJ.

  4. Avatar Xpert says:

    Put something similar in every report and be done with this stupid stip: a copy of the appraiser’s E&O certificate is on file with the AMC. The E&O provider does not allow the certification to be provided to non-intended users.

    • Avatar jjr says:

      I work on ocassion for an AMC that suggests this very statememt and use it when necessary Although a different AMC thinks otherwise and gratefully I will no longer be on their roster, once the drama subsides – this experience involves an Idaho mid century single level waterfront property perched high above the river, originally a 2/1.0 converted to a 1/2.0 and an undisclosed [no pre provided] additional/adjoining parcel – reverse mortgage, fun stuff!

      Last year at a moment of weakness, in an effort to satisfy the letter of engagement’s request for a copy of EO coverage be included, attempted to provide the `on file’ comment only to find out a week post delivery both review and lender found it unacceptable. I then provided a cropped image showing only the insured name and policy dates, indicating coverage yet no amounts, policy # or agency.

      Despite the assignment passing through review in 10/2017 and paid, I have recently been receiving a barrage of flack from the AMC’s review dept, chief appraiser, lender and now AMC legal department counsel stating the letter of engagement is under review. and I MUST immediately provide the full document [undue pressure?] – I had no idea no current data was on file but I’m not big on threats, kind of takes the civility out of the conversation. A simple hey we need to update our files prior to assignment typically will suffice.

      Well, now, being the ray of sunshine that I am I have consistently pushed back, indicating as per engagement, evidence of current insurance has been provided and if the AMC or lender needed a full copy please refer to the one on file in my roster profile. In reality it seems the AMC has dropped the ball regarding requests for current updates for their roster.

      Just yesterday, a staffer [actually the only civil individual in the group as best I can tell] sent an email indicating his need for the page to make my roster profile current and for me to remain on their roster? He stated he gleaned a copy of my current certification from the report updating my file but did not have a copy of my current E/O?. To support his statement he attached a pdf of my profile showing my licensing data from 2015! [we all get those annual update requests from all over the planet] Guess they forgot

      This seems to explain the blow back and continued pressure – they awarded a bid to someone who no longer active on their roster, paid the individual for the delivered product and shipped to the client. Three months later they are throwing a fit and making threatening demands? Continue to browbeat/threaten/pressure me so they don’t have to admit their flawed record keeping procedures to the lender and/or HUD?

      Any constructive input would be greatly appreciate – an outstanding 2018 to all, jjr

      • If you had E&O during the date in question I’d consider sending a copy of the letter to my E&O carrier asking why these people would be entitled to a copy of the policy other than the cover page.

        Was their full engagement letter a part of the actual order downloaded or is it a linked boilerplate reference? Its not worth and engagement complaint with the state, but I DO like the push back.

      • Avatar jjr says:

        Thanks for response – they’re seeking a copy of the full declarations page [typical of AMCs as you know] – the issue seems to be a way to cover themselves, now, as they did not have my current data when they awarded the bid

        They haven’t bothered to send email update requests, as most do annually, as I rarely work with their group due to past experience of this `hounding’ scenario – complete pain with inane requests, etc – I placed a bid on the assignment, against better judgement, thinking there was a likelihood of staff changes [which may have occurred but apparently not mindset]

        Basically my profile was not active as I hadn’t updated my qualifications in their system – they did not have current data ie certs/ and insurance – when I provided a cropped exhibit of proof of insurance it seemed acceptable until months [2+] later when they discovered their files/my profile had evidence of licensing back from 2015 [staffer email it to me] – certifications easiest enough to confirm online but not insurance amounts?

        I attempted to adhere to the letter of engagement [USPAP] by providing evidence of insurance just not the full declarations page – engagement requests copy of E/O declarations page and does not specify the need to exhibit amounts, carrier or account number – I have no idea where the data might land and have been advised over the years to avoid `advertising’ insured amounts – I perceived I provided the relevant, necessary and pertinent data per engagement – name of insured individual and evidence of an active policy with effective and expiration dates displayed

        Based on the article it appears they may have violated Federal requirements or some statute for AMCs, requiring current qualifications of those they assign work I do not know those laws prior to assignment

        As the staffer shared they managed to pull a current copy of my certification for that state and placed it in my newly re`activated file’ – it looks like they are applying the pressure re: E/O declarations page to copy and backend `update’ as well – I shared in my response had they simply said hey, need updates prior to awarding assignment to reactivate your file – no issue – but instead they come back months later harassing me about previously addressed issues and would not accept any explanations – basically change your report to what we want you to say, despite additional potential liabilities, or we will continue to harass until done so –

        When I continued to explain the issues I had with some of their requested `blind’ statements putting me further at risk [no prelim provide, repair dollar costs breakdowns, etc] and would not provide the data or contractor repair estimates, I pushed back – when it seemed the chief appraiser grasp my issues with sticking my neck out even further on this complex residential estimate of value – BAM here comes the E/O page problem – looks like they found they may have violated some process and are pound on me to fix

        In all my time appraising I have never had to deal with such harassment and feel provided sufficient proof of being insured as requested as the engagement requested – am I wrong?

        Look forward to your input

  5. Avatar Carl says:

    Agreed. Quit being a pushover and learn to say no.

  6. Avatar Jason says:

    Pre AMC we never had to include our licenses and never our E&O info. If you include your E&O policies in your reports, do so at your own peril.

  7. Avatar Bill Johnson says:

    Next time you go to the doctors office ask the two nurses who help you for their insurance information. Hell, just ask the doctor, the nurses, the lab technicians, the pharmacists, and the hospital administrator for their insurance paperwork. Papers, need papers.

  8. Avatar Jack Of All Trades says:

    Just one of the many, many problems with this profession.

  9. Avatar Wayne Courtney says:

    What an occupation this is! None of us should have to be told to refuse to include E&O information in our appraisal reports. That in my opinion also goes for allowing background checks. Yes, I know that each of us work in a different area and not all areas are alike.

    An example: Had a report due on 18th. and it was turned in today (20th). Lender sending standard bullshirt “late” notices, with reminder that late delivery could adversely impact future assignments…yappity, yap! (this was late because the home had been vandalized with front door stolen as well as most other stuff) And I do not care!

    At the same time the above is happening, the same client is sending me a new request for an appraisal with a ten day turn time. I quoted back 12 days and they accepted. Both of these are at $450.00 each. This is a large credit union and a good client. Sometimes this breakdown in communication is just too much! I most certainly admit that I am too old and grey to put up with the bull dished out by AMCs. It does not take me 12 days to do a residential assignment. That is in addition to all the rest ahead of it. Honestly, we must receive at least 2 – 3 assignment requests each week from various AMCs wanting a price and turn time on a local assignment. I have not accepted an assignment from an AMC in well over 5 years. I am not signed up with any of them.

    The purpose of my rant is not to brag about my business. My purpose is just to ask why in the world with appraisers dropping out of this occupation at over 200 per month are so many of my fellow appraisers having to grovel to make a living? My opinion is that we have way too many parasites taking a bite out of our fee before it gets into our bowl!

    Do a google search of appraiser shortage. See who are the ones posting how serious the situation is! See who seems to have all the answers! you will notice that group of clowns are the folks who want to ride you (typical appraiser) like a rented mule! These are the ones that want your dues money, your subscription money, want to TEACH/COACH you! LOL   How stupid can we be?

    I saw today where the NAIFA and the ASA may be merging. That may be a sign of progress for our occupation. I had earned the IFAS designation but dropped out of NAIFA a few years ago. A heads up, this merger could show some real promise! If this group would just listen to some new ideas from some old folks…they could emerge as top cat!

    • Mike Ford Mike Ford says:

      I agree. ASA and NAIFA combined produce a stronger organization than the sum of the parts (imho).

      AGA has worked with both organizations and respects each. AI has real cause for concern.

      With it’s diversified disciplines and excellent educational offerings AND adherence to meaningfull standards, even when those standards may be ‘inconvenient’ for some members the ASA could take over the AI’s former national recognition for being a premiere appraisal organization.

      ASA has a track record of being on the right side of legislation affecting appraisers. Unlike the other organization that falsely ‘claims to speak for all appraisers’ in many of their public presentations.

      I’m seriously considering joining even as I continue to organize and work with the American Guild of Appraisers (AGA). I think there is still a need for both.

      • Avatar Wayne Courtney says:

        Mike, as always you have made some very good points. “The AI’s former national recognition for being a premiere appraisal organization”…In other words the AI has always said we B D BEST because we say we B D Best…Most of us totally know that is crap! The AI seems to jump in front of other groups to say that they represent the interests of appraisers. I am for sure one appraiser that they do not represent!

        I had earned my IFAS designation from the IFA. I have met the requirements to be an SRWA from the International Right of Way Association (another good group). Also an approved arbitrator by the TX Comptroller, GRI, SOARS, Approved to teach by TREC and TALCB.

        Honestly I would join the AGA but I will be 66 in July and I have very little fight in me. My schedule is June trip to Las Vegas, July cruise to Alaska, July trip to Las Vegas, July cruise to Bahamas, October cruise to Jamaica, Belize, etc. I did say that I was semi-retired. All I want is a couple of $450. assignments each week or so and I may be able to do my bucket list visit of the Figi Islands! Wish me luck! I sure do wish all of my fellow appraisers the best!

        I keep telling myself that I do not care what happens to the appraisal profession, but I really do care! It has been my life and my career. Maybe you would prefer to work and send some AMC dude to visit the Figi Islands…if so, pay their way! Lets work together and solve these problems!

  10. Avatar Timo Moxo says:

    What’s with all the cloak and dagger bs regarding E&O insurance policy demands. You have a car accident and it’s your fault you must provide the injured party with your proof of insurance. Period.

    If you’re not doing anything illegal, then you have nothing to worry about. It sounds like most of the posters here feel that just by virtue of providing the information, someone’s going to manufacture a problem and tender a claim. Who would go through the hassle and violate the law by making a fraudulent insurance claim ?

    Conversely, if you read the case of the United States of America vs. Landsafe Appraiser Services, an AMC now owned by CoreLogic, This veteran appraiser at Landsafe blew the whistle because the fraudulent conduct occurs on the part of the appraiser/AMC, not the homeowner. I know of one case where the appraiser was found guilty of over eight counts of falsifying information, ethics violations, and breach of contract by the Appraisal Review Licensure Board, paid a puny fine and still refused to honor his professional obligation and provide his victim with the E&O carrier policy information.

    Me thinks thou dost protest too much…

    • Avatar JRHolly says:

      You are either naïve or just haven’t been around. I worked for an individual that was sued multiple times by the home owners because he did not check a box or accidently did and the item wasn’t there. There is no good reason to publicly display your insurance. You are correct that if you have a car accident you have to provide it. But I do not see you putting it on the car so that someone can say hey he has good insurance lets go after him. You provide it after the accident and that is what you need to do here. Besides talk to your insurance the policy you gave them will more than likely not be in existence when the suit arises and that is why the good companies provide coverage for previous acts. If you do not think there are individuals that will violate the law then go to the prison system you will see lots of them. I worked in that system for over 27 years and have read their records. They are out there. Not everyone is a Saint.

  11. Timo many policies are void (or voidable) if vehicle is used for business purposes without a commercial use rider. Depends on your state and your carrier. (1) added cost of rider is not supposed to be too much so we all probably could get it (2) Some feel that IF they are doing work for someone else then let THEM get whatever extra coverage they think they need. Just preferences in how people handle their business is all. Pushing back against intrusive requirements  is not unreasonable.

  12. Avatar Marcus Aurelius says:

    It’s petty & borderline deceptive to not provide this when asked. Several states require you to provide this when asked. I wasn’t raised by wolves & provide it.


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Quit Doing This. Just Say NO!

by Dave Towne time to read: 2 min