Have to give a deposition

[Joe Milla]

I did an appraisal back in 2003 for a purchase. The borrower took a 3 year arm. When they went to refi in 2006, they found out they were upside down on the mortgage. Borrower says I over valued the home in 2003 and now is suing me, broker, and seller. My attorney and I will sit down the week before to go over it, but I was wondering if anyone who has been through this before could also give me some advice as what to expect. TIA.

nervous

 

[Workbox]

Who determined that it was over valued? Was it reviewed? I have had the same issue before with reviewers that do not do their due diligence and find more errors in their reports.

 

[TEL2002]

Did you or didn't you over value it? If you did, suck it up.

Did they take out one of thos 125% loans?

Is there any equity type loan actions against the property since your appraisal?

I've never done a deposition, but I would say you should never over explain an answer. Keep it very short. Anything you say can open up new avenues of questioning. Don't provide them any additional info, unless it truly supports your situation.

Remember they have to prove that you were wrong.

Go back over that 2003 market with a fine tooth come. Look for any possible weak areas in your report and prepare accordingly.

Good luck.

 

[Vernon Martin]

I was in a deposition 6 years ago for not quite the same reason. Here are some suggestions:

1. Know all the facts supporting your side of the story, including data on the slide in home prices since your appraisal. He who has the most information often wins in court.

2. Always tell the truth, because if they catch a lie or a contradiction, your credibility in court is finished.

3. Take a valium before the deposition.

 

[Vernon Martin]

I forgot to also mention the concept of privity. If you did the appraisal for the lender and had the language in your report that they alone were the intended user, this may shield you from a borrower who had already made his purchase decision before even seeing your report, any way.

 

[Pamela Crowley (Florida)]

GET A COPY OF THE APPRAISAL REPORT USED FOR THE MORTGAGE!!!!!!!

Contact me if you'd like to chat.

 

[Alison Swain]

First of all, WHEN in 2003??? If it was even one day over 5 years ago, simply explain that you have no records on which to base a defense.





On second thought, that may only be a good strategy when you're before the state.

 

[Mike Boyd]

Who determined that it was over valued? Was it reviewed? I have had the same issue before with reviewers that do not do their due diligence and find more errors in their reports.

He is being sued! They will try to prove he over-valued it and I'm sure they will eventually have retro appraisals done.

 

[PropertyEconomics]

Be sure to know your file frontwards and backwards. IF they ask you a question you dont know, simply say you dont know. They will ask you the same questions several different ways so dont get frustrated ... listen carefully and simply answer the question the same way each time. Dont let them trap you into different answers.
IF you dont understand the question .. simply say you dont understand the question and ask him / her to rephrase it.
Getting rid of your file if its over five years old is balderdash .. DO NOT DO THAT ..
Simply do the best you can, support your analysis the best you can, and KNOW THAT FILE ....
Also ... remember you have an attorney there that you can rely upon if you feel like your trapped. At any moment you can ask them for a private consultation with your attorney ... all you have to say is Id like to speak to my attorney privately, would you excuse us. There is nothing wrong with getting the advice at the exact moment you need it.

This is all pretty scary to you ... use your feelings to your benefit. Know that file, be confident but not cocky. Depositions are nothing more than fact finding missions and they are seeking facts about your appraisal.

You will do well ... keep calm .... and best of luck to you. Come back with any questions you may have and all will help you here in the best way they can. Listen to sound reasoning and run everything past your attorney ... thats what they are there for.

 

[Kevin A. Spellman]

Joe there is precedent for a case similar to yours here in MA. It was a case on the north shore, I think it was in Ipswich the same scenario happen to an appraiser from an appraisal done in the the late 80’s or early 90s. The bank foreclosed on the property. The owner blamed the appraiser if they valued the property correctly they would have been denied the loan and they would not have bought the property. The court ruled the owner had no rights to the appraisal and was done solely for the purpose of the lender and not for the owner.

If you subscribe to the Banker & Tradesman you may be able to search their archives for the names and the attorney for this case. It was in Middlesex County. There is also another case in San d Diego on this forum, same situation. The San Diego owner failed also.

Make sure you are not liable for the stenographer’s fee. If the attorneys’ moves forward with litigation, ask your attorney to request all loan documents (both loan documents) and all participants’ names.

Ask if the owner of the subject’s property if they are acquaintances or have family members who work for the new lender or their agents and also for the attorneys representing them.

Do research on the owners, see if they receive an equity line or second mortgage after the sale occurred. Call the municipality and see if the taxes and water is being paid. Go to the building department to see if permits were issued after the sale occurred. The more you know about the owners of the property the more they will become uncomfortable.