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

[Smokey Bear]

I always have the borrower sign my reciept that says they are aware that they are NOT my client, etc. I think I'm going to add something that says I have no fiduciary duty to them.

BTW, the appellate court only deals with issues of law, not issues of fact. They merely determined that an appraiser has a fiduciary duty to the borrower since they are a foreseen user of the report. So this goes back to the lower court and allows that count to be litigated, along with the issues as to whether the appraiser breached that duty. It sets a precedent only for that jurisdiction and only if it's not appealed and overturned. Other jurisdictions can cite the case as persuasive (once it's final), but are not obligated to follow it.

 

[Calvin the Airedale]

We really need to learn what creates a fiduciary relationship, and what does not, on this forum.

What's your point webbed? When I talk about fiduciary obligation, I'm talking about the bank's obligation to its customers, not ours to the bank or to anyone else. Our obligation, of course, is to be an unbiased teller of truth, (the truth of our own opinion).

As to the bank's fiduciary obligations, they still exist in most banking relationships, or perhaps I slept through those six AIB courses prior to the start of my appraisal career.

 

[Calvin the Airedale]

Calvin, you really have no clue as to how the legal system works and how juries in certain areas act. Please trust me when I say that there are certain places that facts just do not matter to the jury........and the appraiser will simply be seen by the jury as an outsider with deep pockets whose insurer can afford to pay the verdict....it is very sad, but that is just the way it works.

As with all business risks, one cannot plan for injustice. One can only conduct his practice in a scrupulous fashion, to recognized standards. As for legal risks (or any others) there are strategies to limits those risks: form of ownership or insurance. But I maintain still, that the best way to mitigate risk is to be careful in the first place.

 

[Sheikh Yerbouti]

This is why I don't carry E&O insurance. Blood from a turnip and all that....:new_all_coholic:

 

[timd354]

As with all business risks, one cannot plan for injustice. One can only conduct his practice in a scrupulous fashion, to recognized standards. As for legal risks (or any others) there are strategies to limits those risks: form of ownership or insurance. But I maintain still, that the best way to mitigate risk is to be careful in the first place.

Of course one can plan for increased risk from injustice by adjusting his or her fee to account for that increased risk....that is what intelligent business people do and that is why some borrowers pay a higher interest rate than other, based upon their credit profiles.

You are correct that one can take also take steps to mitigate risk as much as possible by being careful in the first place and possibly avoiding appraising properties in some jurisdictions or charging higher fees for certain jurisdictions in order to be properly compensated for the increased risks in those jurisdictions.

 

[Mr Rex]

You are immune from civil suits, given the pre-printed stuff in the form.

 

[Otis Key]

You are immune from civil suits, given the pre-printed stuff in the form.

I resemble that remark!

 

[Terrel L. Shields]

what was the reason for the square footage difference, converted garage, attic, etc?

That has not come out yet because they are arguing procedure, not trying the facts of the case. I can feel his pain. I spent $6500 DEFENDING MYSELF and we never even got to depositions. The guy argued that he "relied" upon my appraisal even after admitting it wasn't even written until 4 days after he purchased, paid for and had a deed in hand for the property that he bought from his own COUSIN....The dous ex machina to achieve this heady foresight was to claim the bank told him the value would be appraised at the sales price....even before they ordered the report.

The case isn't tried. We'll see what we see.

 

[CANative]

If it were only that easy...yours is a very naive view.

I was a litigator for 5 years and believe me that there is a very good reason that litigating attorneys call expert witnesses *****s. Trust me, if the door is opened for buyers to easily sue appraisers, plaintiff's attorneys will line up plenty of so-called USPAP and appraisal experts who will just be *****s that will find things wrong in reports, even there is nothing wrong in the reports or even if the reports were done in an overall credible manner with some minor erros and these minor errors will be blown up by the expert witness/***** into "evidence" of appraisal fraud, etc. If you think that you will find actual justice in the legal you are sadly mistaken. If you think that the appraisal system and the mortgage lending system are rotten, you should see the level of rot within the legal system in this country.

May God help anyone (including the innocent) in this country whose fate is the hands of a jury...as juries are not exactly composed of the more intelligent people among us.

My point was "don't worry about things you can't control."

Don't put verbiage in reports like "errors in GLA will not effect market value." Say rather "errors in GLA will not effect MY OPINION of market value."

That way there's nothing to argue about.

 

[Smokey Bear]

I'm surprised the Appeals court made a ruling of law when apparently
the 'facts' of the case were not clearly determined and will now have to
be determined.

That's how it works. You have to decide if the law even applies to the complaint before you decide the facts under the law.