Homeowner is threatening to sue me?

[Carmella]

Hello,
I just received a phone call from a homeowner that I did an appraisal at his home for a mortgage company 2 months ago.

He wants a copy of the appraisal, and I told him I couldnt give him a copy because he was not my client.

He said " i paid you for the appraisal at the door, so I am your client".

How do I explain to him that even know he paid me for the appraisal I cant give him a copy?

I understand where he is coming from, but I do not know the correct way to explain it.

Please Help.
Thanks,
Joey

 

[JRS at OBX]

I would tell him to pick any appraiser out of the telephone book and ask them how it works.

 

[Steer]

Residential Borrowers May Receive Copy of Appraisal​

December, 1991 amendments to the federal Equal Credit Opportunity Act, known as 12 USCA Section 1691(e), require a lender to provide, on written request, a copy of the appraisal report to any person who applies for a residential mortgage.
The text of the section reads: "(e) Each creditor shall promptly furnish an applicant, upon written request by the applicant made within a reasonable period of time of the application, a copy of the appraisal report used in connection with the applicant's application for a loan that is or would have been secured by a lien on residential property. The creditor may require the applicant to reimburse the creditor for the cost of the appraisal.".

​

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Important Notes​

• This law applies to nearly all real estate secured residential mortgage lenders, including banks, S&Ls, credit unions, mortgage bankers, mortgage brokers, mortgage originators, etc.

• Rules promulgated by the Federal Financial Institutions Regulatory Agencies allow borrowers a 90 day period during which to file the written request for a copy of the appraisal.

• The lender must supply a copy, not the original appraisal report.

• The residential borrower, or potential borrower, must obtain the appraisal copy from the lender, not the appraiser.

• Only the residential borrower, or potential borrower, has a right to receive a copy of the appraisal from the lender. Sellers, brokers, and other parties who are not the borrower have no right to obtain a copy of the appraisal.

• The lender who ordered, accepted delivery and based a business decision on the appraisal is the appraiser's client, regardless of who paid for the appraisal, or when, or how. The appraiser must comply with the client confidentiality provisions of the Uniform Standards of Professional Appraisal Practice.

• The appraiser has no obligation to discuss the appraisal with the borrower, or proposed borrower. The borrower is not the client. The appraiser must comply with the client confidentiality provisions of the Uniform Standards of Professional Appraisal Practice.

The appraiser may not reissue, retype, re-certify, update, transfer or otherwise pass an appraisal report prepared for one lender/client to another lender/client. The second, third, etc. lender/client needs to order a new appraisal. See AO3, AO25, AO26, and AO27 for additional information.

 

[Steer]

http://commerce.appraisalfoundation.org/html/USPAP2008/FAQ/faq_77_.htm



FREQUENTLY ASKED QUESTIONS



77. ARE BORROWERS INTENDED USERS ?

Question:
Frequently, the borrower in a mortgage finance transaction is provided with a copy of the appraisal report; and in most cases, the appraiser knows that the borrower will be receiving a copy of the appraisal report. When the appraiser is aware that the borrower or any other third party will receive a copy of the appraisal, does this make that third party an intended user?

Response:
No, the fact that a borrower or anyone else receives a copy of the appraisal report does not make them an intended user. The concept of an “intended user” in USPAP is framed within the context of the appraiser-client relationship. An “intended user” is defined in USPAP as:



the client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment.


There are several things to note in this definition. First, intended users of the appraisal report must be identified by the appraiser. Secondly, this identification is made at the time of the engagement process so the appraiser can make a prudent judgment about the scope of work to apply in the assignment and the level of detail to include in the report.


It is also worth noting that the concept of “intended use” and “intended users” are related to the type and definition of value in an assignment. Appraisal reports for loan transactions are typically used to substantiate the real property’s market value as underlying collateral for a particular loan. The fact that the lending institution is required by law or regulation to make certain disclosures to the borrower about the loan and the basis for the loan decision does not alter the intended use, intended users, or type and definition of value in the appraisal assignment.


STATEMENT No. 9, Identification of Intended Use and Intended User further clarifies this issue by stating:



A party receiving a report copy from the client does not, as a consequence, become a party to the appraiser-client relationship.


Parties who receive a copy of an appraisal, appraisal review, or appraisal consulting report as a consequence of disclosure requirements applicable to an appraiser’s client do not become intended users of the report unless they were specifically identified by the appraiser at the time of the assignment.

 

[Smokey Bear]

Life would be much easier if you handed every borrower the above handout when you inspected, AND tell them they have to get the copy from the lender.

 

[Lloyd Bonafide]

Life would be much easier if you handed every borrower the above handout when you inspected, AND tell them they have to get the copy from the lender.

That would be a good idea. I try to remember to tell the owner on any refi that they can obtain a copy of the appraisal from the lender, and not from me, but giving it to them in writing would be even better.

 

[stefan olafson]

This is exactly why I take five minutes at each inspection to explain the appraiser client relationship! Even though a homeowner may pay me at the door, I let them know that after I leave the property I won't be communicating with them again, unless I need clarification on some item relevant to the appraisal. My responsibility is to the client and intended user, not the homeowner.

 

[CANative]

Just tell the homeowner that there are laws which prevent you from giving them a copy of the appraisal but that the same laws REQUIRE their lender/broker to give them a copy.

 

[Smokey Bear]

giving it to them in writing would be even better.

And having them sign it (on the receipt also explaining that they are not the client, not the intended user etc. ) is even better.

 

[Carmella]

Thanks for the reply