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Old 07-26-2005, 10:51 PM
Ray Miller's Avatar
Ray Miller Ray Miller is offline
Join Date: Feb 2002
Location: Southwest Wisconsin
State: Wisconsin
Professional Status: Licensed Appraiser
Posts: 12,000

Legal Advise from my attorney:

After receiving the letter from LSI two weeks ago and the new mail from TSI. I took both to my attorney for review.

Is advice to me was; make sure you have excellent insurance policies in place for at least $20 million. Based on the number and type of appraisal you do. If you sign either/or agreements with those appraisal management companies. Be sure that you have two policies. One for your person and one for the corporation. If these loans are sold to the fed and end up in a federal court. Your corporation is a stand alone entity, just like you are. You need coverage for both... Because you corporation can not cover your legal fee’s or lost if any. That is if you are both named in a law suit.

His next words were, you may want to reconsider who you do business with and stay away from any that requires you to accept the responsibility if a loan should go bad. You can believe that they will sue any and all. With that sign agreement you are taking most of the risk. He said you risk can last the life time of the loan.

He said he is looking for the E & O carriers to either drop their coverage of appraisers or the rates to go out site in the next few years as more and more claims are filed. He reminded me again that it is not the $ amount of the law suit so much, as the cost to defend that will get me.

One branch of his law practice deals with bankruptcies and home owners who are up side down in their loans for those houses. He said business is double over last year at this time.
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Old 07-26-2005, 11:11 PM
Tom Foster's Avatar
Tom Foster Tom Foster is offline
Join Date: Apr 2003
Location: Southern California
State: California
Professional Status: Certified Residential Appraiser
Posts: 1,815


Now I won't be able to sleep tonight !!!!!!

Old 07-26-2005, 11:16 PM
Karl Karl is offline
Join Date: Jan 2002
Location: Arizona City AZ
State: Arizona
Professional Status: Licensed Appraiser
Posts: 7,602

Same advice I got over 3 years ago. I do NOT sign ANY relationship papers with ANY Lender & I still got to much work. Those that do NOT think anyone ever gets sued I'll let them sign. I'm BETTING many appraisers have signed these things "Cause they NEED the work" Remember an Appraisal doesn't come back to haunt you for at least 18 months average is 3 years.

Of course there is NOTHING to worry about because Real Estate only INCREASES in Value & the Contract is todays Value. So by the time 18 36 months rolls around that property is at least 50% more valuable if the values are increases 25% overnight right now, so WHY worry.

The News Media says so, so it MUST be true. They've been WARNED not to lie.

BUT!! What IF they have LIED????
Old 07-26-2005, 11:55 PM
Tom Barclay Tom Barclay is offline
Join Date: Apr 2002
Location: Coos Bay, Oregon
State: Oregon
Professional Status: Retired Appraiser
Posts: 2,116

I agree with Karl. I have been throwing those agreements in the shredder for years. I also won't sign the VC condition sheet. All that drivel, for some of the worst clients to have. Still as busy as I want to be.
Old 07-27-2005, 02:40 AM
Bill_FL's Avatar
Bill_FL Bill_FL is offline
Join Date: Aug 2002
Location: Cliqueville
State: Florida
Professional Status: Certified General Appraiser
Posts: 4,871


What do thsoe two documents say?
Warning: this post not spell checked because I know what I meant to type.
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Old 07-27-2005, 07:31 AM
Edd Gillespie Edd Gillespie is offline
Join Date: Oct 2004
Location: Kansas Territory

Posts: 1,113

Originally posted by Ray Miller@Jul 26 2005, 09:51 PM
His next words were, you may want to reconsider who you do business with and stay away from any that requires you to accept the responsibility if a loan should go bad. You can believe that they will sue any and all. With that sign agreement you are taking most of the risk. He said you risk can last the life time of the loan.
Good advice!

Most of his advice seems like worst case scenario, but then there is Murphy's law. So Ray, who's going to say, "Don't follow your lawyer's advice."?
Sure hope the clients don't all get the fever. I've been shopping E&O for several months and have you noticed the rates have about doubled in the last few years? I guess the escalation hasn't quite reached the skyrocket stage, but my goodness folks.
Some sources of E&O are just dropping out. From the stories that are exchanged on here it's pretty difficult to believe an appraiser can ever be ultimately held responsible for a loan going belly up. Is it possible that the type of lawsuits where everybody in sight is sued are on the increase, or that some of the insurance companies have discovered a new source of revenue?
The policies I see only cover negligence so it just doesn't wash ot blame all this on those who deliberately mislead someone (like skippy seems to do occasionally).
So I take there goes LSI and TSI?
I quit LSI back aways. My reason had to do with comments made about appraising by their head appraiser. Designated appraiser without a clue what USPAP had to say about much of anything. I got the impression the outfit is basically shooting from the hip and I thought any dirt they stir up is going to rub off on me.
Maybe they are looking for a way to deflect some of the attention they are going to get when some of the bad stuff they have done comes back to bite them.
Your lawyer may have picked up on that. I have the impression that those who do their job correctly very seldom think about E&O.
Old 07-27-2005, 09:47 AM
Jim Onderisin Jim Onderisin is offline
Join Date: Sep 2003
Location: Du Page County, Illinois
State: Illinois
Professional Status: Certified Residential Appraiser
Posts: 2,847

Used to do work for Quicken before they (and others like eAppraiseEmAll) got on the cheap-or-lower bandwagon. They started calling themselves TSI at that time. That's about the time our relationship began dissolving. They recently sent that thick package of information. I haven't read it. Couldn't imagine they'd want to pay what I'd need to spend time completing the forms.
Old 07-27-2005, 09:56 AM
Otis Key's Avatar
Otis Key Otis Key is offline
Join Date: May 2004
Location: Mile High
State: New Mexico
Professional Status: Certified Residential Appraiser
Posts: 15,970

Ray - he's your lawyer and I'm NOT one. However, it sounds real familiar to what my lawyer told me some time back and sounds similar to the comments he gave me and others at a meeting about the new Fannie forms.

I shred those forms that come in with "sign and hold blameless" and/or "sign and agree to accept". I don't even want the evidence around. I quit doing AMC work, for the most part, some time ago. I won't lower my fee and I will not sign any of those STUPID forms.
Old 07-27-2005, 10:12 AM
liznindy's Avatar
liznindy liznindy is offline
Join Date: Jan 2002
Location: Central Indiana
State: Indiana
Professional Status: Certified Residential Appraiser
Posts: 1,253

Take note, appraisers who think they can't be held accountable for the value opinion because, after all, it is only an "opinion".

Maybe I'm naive, but I think, for the most part, an appraiser doing due diligence and performing appraisal services ethically, will not have to worry too much about being sued.

But I would worry about the investors coming after me, if I were a skippette.

I do have some serious concerns about the new Fannie forms and, when using them, will be adding more disclaimers (whether the cerification allows or not).
Old 07-27-2005, 10:23 AM
Mike Garrett, RAA's Avatar
Mike Garrett, RAA Mike Garrett, RAA is offline
Join Date: Jan 2002
Location: Colorado Springs, CO
State: Colorado
Professional Status: Certified Residential Appraiser
Posts: 21,064
Default worry?
A Former AQB Certified USPAP Instructor

Last edited by Mike Garrett, RAA : 02-10-2006 at 12:39 PM.
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