Quit Doing This. 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Is there any way you can get this ‘correction notice’ rescinded?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.