Tagged: appraisers

Protect Yourself with a Limitation of Liability Clause . Limitation of liability clauses are contractual provisions used to cap the liability of a party to a contract or transaction. - Imagecredit Flickr - Tax Credits 3

Protect Yourself with a Limitation of Liability Clause

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...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions

Unpermitted additions assignment condition 1

Unpermitted Additions “Zombie” Assignment Condition

Unpermitted Additions This is a “zombie” assignment condition that seems to never die. Let’s agree that unpermitted means something was constructed without a required written permit. There are plenty of jurisdictions that don’t issue permits because the permit process doesn’t exist. The assignment condition goes something like this: The appraiser is not to include any GLA from any unpermitted additions unless they use comparables that have similar unpermitted additions. Here’s what Fannie Mae stated in their September 2014 FAQs: If the subject property features an unpermitted addition, can the square footage of the unpermitted addition be included in the total gross living area reported on the appraisal report? If the appraiser has identified an addition(s) that does...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

Appraiser soon to be jailbird - convicted of a felony for incorrectly reporting the last sale date of property in an appraisal used to defraud a lender in a mortgage fraud scheme 4

Appraiser Soon to be Jailbird for Fraud

In a million dollar mortgage fraud scheme Appraisers, An appraiser in NY state has been convicted of a FELONY for incorrectly reporting the last sale date of a subject property in an appraisal report, which was used to defraud a lender in a million dollar mortgage fraud scheme. You can read the full story here. Per the info in the story: “Essig is the owner and operator of Essig Appraisals, an appraisal company that specialized in residential appraisals. According to statements made in Court today during Essig’s plea, Essig admitted that he made a false entry in an appraisal that...

Appraisal / Appraisal News / Appraisal Quality Monitoring / Appraisers News / AQM / Collateral Underwriter

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What Should an Appraiser Do?

Burdensome indemnity language required by a lender or AMC Appraisers are often required to sign lengthy contracts to obtain assignments from lenders or Appraisal Management Companies. These contracts outline the scope of work, when the assignment is due, how to transmit reports and other items that require review and understanding. Once the contract is formalized, the appraiser is then legally required to comply with its’ provisions. One important and often troublesome requirement is the Indemnity Provision. The concept of indemnity means “security against hurt, loss or damage”. Through indemnity, one party can shift the responsibility of loss to another party...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

Scope Creep - Appraisers 4

Scope Creep!!!

Seems like everyone hates AMC’s and scope creep. Scope Creep!! I ordered a sub at a sub shop. I love tomatoes! So I asked for extra tomatoes. I was charged. I took my car in for inspection. I told the mechanic since my car was up in the air and the tires were off to rotate the tires. I was charged. BUT, the tires were off. The cook’s hand was in the tomatoes. WHAT’s up? I was asked for two listings. I wanted to charge. I did a restricted report on an office building (sales comp approach only). The client called and wanted a cap rate, then an expense ratio. They refused...

AI / AMC / Appraisal / Appraisal Institute / Appraisal Management Companies / Appraisal News

Appraisal Management Companies (AMCs) renewal 0

AMCs Renewal: Two Years Later

AMCs procrastinated or missed the renewal period We started registering AMCs about this time back in 2013. It was a slow roll from the nascent 9 applications received in March of 2013 to a peak of 42 applications received in August 2013 just ahead of the deadline to register. Since that time the number of AMCs in Illinois has ebbed and flowed. At one point we had 192. As of this writing, we stand at 155. Nationwide there are less than 700 AMC entities. The universe is small. We’ve already completed our first renewal that ended on December 31, 2014. Like...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

Appraiser GLA vs Assessor GLA 8

Appraisers’ GLA vs Assessors’ GLA

GLA in your appraisal reports being questioned Appraisers, today (4/30/15), Freddie Mac released a document showing Warning and Fatal codes that will trigger if certain items are found in your reports sent to Freddie Mac through the Uniform Collateral Data Portal (UCDP), as of June 30, 2015. In 25 pages of codes, only 4 are ‘fatal’ and those are for items you should not be overlooking. See the PDF below and take a moment to look over the document. The very first ‘warning’ code is this one, which has two variations: FRE1001 The gross living area for the subject property ([GLA] sf)...

Appraisal / Appraisal News / Appraisal Quality Monitoring / Appraisers News / AQM / Collateral Underwriter

LenderVend Requirement For Appraisers to Upload Copies of Appraisal Workfiles - Imagecredit Flickr - GotCredit 23

LenderVend Requirement For Appraisers to Upload Copies of Appraisal Workfiles

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...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / E&O

Should Appraisers Include Their Workfile Their Your Submitted Appraisal Reports 9

Workfile With Submitted Appraisal Reports?

Should You Include Your Workfile With Your Submitted Appraisal Reports? Appraisers, On several forums frequented by real estate appraisers, there has been recent discussions about a particular Appraisal Management Company (AMC) owned by a lender who is requiring appraisers to include their ENTIRE WORKFILE with every appraisal report submitted (as of 5/21/2015). The AMC is LenderVend, owned by Provident Funding. One reason why this has come to the forefront is because Provident Funding has had to buy back numerous loans due to alleged faulty appraisals and other underwriting issues. So by demanding the appraiser’s workfile, they are attempting to protect themselves...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News

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The Humility to Ask

I was recently asked by a local lender to appraise 14 vacant lots. Though the lots were all quite similar, 14 separate appraisals were needed (obviously, a large discount was given for the multiplicity). Once a value was established for each individual lot, the lender came back and now wanted a ‘bulk value’ for 10 of the lots. Hmmm. That certainly changes things. Per USPAP in fact, we now have a new assignment. As I inquired to the bank and got more information, it was clear that I was out of my element. The lender did not just need a total...

Appraisal / Appraisal News / Appraisers News / Uniform Standards of Professional Appraisal Practice / USPAP

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