Appraiser hired by lender owes a duty to buyer/borrower.

[Karl]

Lets doi a civil court case:

12 member jury ALL Home Owners

Dumbest lawyer in AZ

Smartest Certifed with Intials plus more intials:

Lawyer What is this USPAP you refer to??

Appraiserr Uniform bla bla bla bla bla

Lawyer is this USPAP a State or Federal law??


Appraiser WELL!!! Huh Da Der Not a LAW BUt

Lawyer Thank You!!! so It's NOT a law.

Appraiser BUT BUT

Lawyer thank you!! you answered the question

Lawyer closing: The Appraiser SCREWED a Homeowner Which one of you wants to be his next VICTIM??

Who gonna win???????????

 

[Webbed Feet]

Karl, change that to Oregon and a bunch of other states...

Lawyer: Is this USPAP a State or Federal law??

Appraiser: WELL!!! I am so glad you brought that up. My state is a USPAP mandatory state. So it has been my understanding it is state law here. But really, you should have checked that out for yourself before asking the question...

 

[Calvin the Airedale]

P.S.

Calvin, your daughter's story only examples my points on how absolutely terrible that contingency is. Even your daughter had no idea what it was she had signed, how undefined it was, or what affect it may have by turning over something in the contract to a third party that no primary party to the contract could remotely predict the actions of.

In my mind what your daughter had was the wrong attorney. As well as a lack of desire and funds to fight it up to the U.S. Supreme Court if need be. As to why there was no attack of a relative of an interested party to commissions on the deal being used for an appraiser... I guess is none of my business. But the bottom line is buyers cannot possibly understand what it is they are signing. Nor does the seller, nor does the lender, nor does hardly anyone involved. That is the entire point.

Two philosphers were walking in a garden when they happened upon an ornamental pond with several very large goldfish. They stood watching for a moment.

"My those fish look contented," said the first philospher.

"You, not being a fish, would not know whether those fish were contented or not!" said the second.

"You, not being me, would not know whether or not I knew if the fish were contented or not," replied the first.

Such is the case in this argument.

You and Tim argue that banks never have given a rip about their customers in such situations. I on the other hand have worked for more than one institution that did. Institutions from the top to the bottom that once believed as do I.

 

[Webbed Feet]

<......snip.......> Institutions from the top to the bottom that once believed as do I.

Or that, believe it or not, that you believed that they once believed how you thought they believed no matter what they really believed. Not only that, but you left out from side to side. So look out for those bi-lateral beliefs you didn't see at the time. I've always found the top often feeds the bottom a lot of nonsense.

I've been told recently not to live in the past. Maybe we both should try that out....

 

[Elliott]

Always fun to watch appraisers play lawyer.

 

[Karl]

Karl, change that to Oregon and a bunch of other states...

You missed the KEY factor: The Jury of 12 Homeowners that could care less about USPAP!! How hard is it for Appraisers to stay awake in a USPAP class ?? imagine 12 Homeowners that are upside down, listening to USPAP in lawyer talk!!! Now again who you think will win???

State of AZ: "USPAP is a GUIDELINE in which Appraisers are to conduct their business. It has absolutely NO juridiction on how banks conduct their's". I interpert that to be a GUIDE not a LAW, So in other words; keep an eye on Chase & flagstars influence on the legal system of AZ. Then HANG ON for B of A and others to join in.

BUT!! of course we have the PROTECTION of the current administration of the Federal Government to PROTECT us.

 

[Webbed Feet]

Karl,

I don't think I missed much. Most, if not all, of those potential jurers would be excused during the jury selection process. Half of them would be retirees, with no mortgage at all, wondering why people are so stupid as to borrow money they can't afford to repay.

See? I can make up an imaginary jury in my mind also. But one difference between us is I can stay awake during any CE classes I take.

 

[Cigar]

This a simple third party beneficiary case, it has nothing to do with fiduciary responsibility or other legal issues as I see it, I also think it's a good well-reasoned decision, an appraiser would have to have blinders on not to see that not only the lender but both the seller and buyer are forseeabley third party beneficiaries of the appraisal, as in all appraisals, if my bank obtains an appraisal for a million dollars on a property I am buying, shows me that appraisal, I have a right to assume that the appraiser is being honest and that the property I am buying is actually worth a million dollars, why would a reasonable person believe that the value of the subject property was any different than what a certified or licensed appraiser appraised it at?

To summarize the court:

[FONT=&quot]After her offer was accepted, on the advice of the[/FONT] [FONT=&quot]seller’s real estate agent, Sage asked her lender, Security[/FONT] [FONT=&quot]Mortgage Company (“Security”), to retain Joseph Blagg of Blagg[/FONT] [FONT=&quot]Appraisal Company, LTD, to perform the appraisal.[/FONT]

[FONT=&quot]Sage had signed a form requesting Security to provide her with a copy of the appraisal, which she received prior to closing.[/FONT]

[FONT=&quot]We deal here with the duty a professional owes to a [/FONT][FONT=&quot]third party in supplying information to another for use in a[/FONT] [FONT=&quot]business transaction.[/FONT][FONT=&quot]

Blagg also was aware that Sage had the right to request a copy of his report from Security and knew that, if requested, Security was obligated by law to provide Sage with a copy of the report.[/FONT]

[FONT=&quot]As noted, Restatement § 552 provides that a professional such as Blagg owes a duty to a third party only when the professional (1) intends to supply information for the benefit of the third party or (2) knows that the recipient of the information intends to supply the information to the third party.[/FONT]

[FONT=&quot]The issue pursuant to Restatement § 552, therefore, is whether the facts support an inference that Blagg knew that Security, the recipient of the information, intended to provide the appraisal to Sage. See id. cmt. h (“It is enough . . . that the maker of the representation knows that his recipient intends to transmit the information to a similar person, persons or group.”).[/FONT]

[FONT=&quot](“the key factor in determining whether a real-estate appraiser owes a duty to a buyer of the appraised property is whether injury to the buyer was foreseeable by the appraiser”);[/FONT] [FONT=&quot]Because the V.A. had contracted for the appraisal “solely because” of the buyer’s application for financing, the buyer was “the most proximal third party there will ever be” to the appraisal. Id. Consequently, the court explained, a real estate appraiser owes a duty “to those involved in the[/FONT][FONT=&quot] transaction that triggered the appraisal report, including, but not necessarily limited to, the buyer and the seller.”[/FONT]

All the facts seem to point to the fact that Sage was a third party beneficiary of the appraisers work. Appraisers all seem to want to rely upon USPAP's definition of an intended user:

[FONT=&quot]10 [/FONT][FONT=&quot]USPAP defines “intended user” to mean “the client and any [/FONT][FONT=&quot]other party as identified, by name or type, as users of the[/FONT][FONT=&quot] appraisal . . . by the appraiser on the basis of communication[/FONT][FONT=&quot] with the client at the time of the assignment.” Appraisal[/FONT][FONT=&quot] Standards Board, Uniform Standards of Professional Appraisal[/FONT] [FONT=&quot]Practice[/FONT][FONT=&quot], at 106 (Jan. 1, 2005), available at[/FONT][FONT=&quot]http://commerce.appraisalfoundation.org/detail.asp?fseq=92.[/FONT][FONT=&quot]USPAP further provides that a party who receives an appraisal[/FONT][FONT=&quot] report from an appraiser’s client does not “become a party to [/FONT][FONT=&quot]the appraiser-client relationship.” Id. at 107. Moreover,[/FONT][FONT=&quot]those who receive the report pursuant to disclosure requirements[/FONT][FONT=&quot]“do not become intended users of the report unless the client[/FONT][FONT=&quot] specifically identifies them at the time of the assignment.”[/FONT] [FONT=&quot]Id.[/FONT]

USPAP may write rules and standards for appraisers, but USPAP doesn't write laws, even if USPAP standards were incorporated into a state's laws they would be administrative statutes, not civil statutes, and this case is civil law, not disciplinary administrative law.

All this being said I'd like to make two points:

1. It would seem to me that an appraisers report as to his/her opinion of value on a given date should be applicable to the whole world of potential users, foreseeable or not, if it's viable for a lender it should be viable for a buyer, seller, the IRS, the State Taxing authorities, or any other third party, to claim that it's an accurate portrayal of value to a lender but not a buyer or seller defeats the legitimacy of the report, which is intended to portray value on a given date, value is value, it's no different depending upon different people relying upon it, the inference here is that the value opinion of the appraiser is higher to a lender than a buyer, a tacit admission that the appraiser "met the numbers". If an appraiser is so concerned about the accuracy of his report dependent upon differing users, he/she should write something in his report like: "The intended user of this report is ________ Bank, the appraiser in making this report foresees no other users and this report is not intended to be used by any other users."
2. From a factual standpoint, not relevant to this appelant decision, what real difference does the square footage make anyway? Value is not dependent upon square footage, or shouldn't be, square footage has nothing to do with the cost, and shouldn't have anything to do with the value, I actually think that appraisers' and realtors' reliance upon square footage actually establishes square footage as a value determiner, which it shouldn't be. For instance a small high quality custom home should be much more valuable than a larger low quality tract home.

 

[Calvin the Airedale]

Or that, believe it or not, that you believed that they once believed how you thought they believed no matter what they really believed. Not only that, but you left out from side to side. So look out for those bi-lateral beliefs you didn't see at the time. I've always found the top often feeds the bottom a lot of nonsense.

I've been told recently not to live in the past. Maybe we both should try that out....

It's clear you don't have much respect for either lenders or banking management. I, OTOH, have met many fine human beings in the banking & thrift business. Obviously, we seem to have run among different crowds.

 

[Webbed Feet]

Calvin,

My level of respect for anyone at all isn't as clear as many would like it to be. So I doubt you've achieved very much attempting to be a claimant of the ability to judge clarity in that regard.