Borrower send letter from attorney wanting appraisal fee returned

[saberry17]

Wanted anyone's advise if this had ever happened to them. I received a letter from an attorney's office that a borrower hired on a property I appraised. The borrower is demanding his appraisal fee back because I did not come up with the value that he and a realtor friends of his says his property should have appraised for. I called my E&O insurance & they stated that they do not help on these matters. They did give me a form to have signed if I decide to return the borrower money. I do not want to return the money because it was a good appraisal. Do not want to waste my time if he files a compliant with the board. I could not believe this attorney states in the letter that his client demands that I re-appraise the property for at least $225,000 or if I refuse to change the appraisal I refund his money.
Just wanted to see if anyone has had this happen to them & how they handled it? Thanks.

 

[Lee Lansford]

My response?

I would thank the attorney for his "offer" but also state that I decline the offer.

Inform the attorney that you were engaged to provide a service by your client (who is not the owner of the property) and it was your client who paid you. You might further suggest that if the owner seeks a refund, that the attorney might be better served by contacting the lender.

I would also remind the attorney that it is improper to attempt to influence the professional opinion of a licensed appraiser.

This is better than telling the attorney to GTH.

 

[Mike Kennedy]

Recommend doing nothing (including responding to the DEMAND letter) prior to consulting an Attorney (RE & Litigation expertise) to review the apparent Coercive communication authored by a Licensed Attorney and the Following Section of the Title XIV Dodd-Frank Financial Reform Law specifically TILA :

SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.
(a) IN GENERAL.—Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 129D
(as added by section 1461(a)) the following new section:

‘‘§ 129E. Appraisal independence requirements
‘‘(a) IN GENERAL.—It shall be unlawful, in extending credit or in providing any services for a consumer credit transaction secured by the principal dwelling of the consumer, to engage in any act or practice that violates appraisal independence as described in or pursuant to regulations prescribed under this section.
‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of subsection (a), acts or practices that violate appraisal independence shall include—
‘‘(1) any appraisal of a property offered as security for repayment of the consumer credit transaction that is conducted in connection with such transaction in which a person with an interest in the underlying transaction compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a person, appraisal management company, firm, or other entity conducting or involved in an appraisal, or attempts, to compensate, coerce, extort, collude, instruct, induce, bribe, or intimidate such a person, for the purpose of causing the appraised value assigned, under the appraisal, to the property to be based on any factor other than the independent judgment of the appraiser;
‘‘(2) mischaracterizing, or suborning any mischaracterization of, the appraised value of the property securing the extension of the credit;

‘‘(3) seeking to influence an appraiser or otherwise to encourage a targeted value in order to facilitate the making or pricing of the transaction; and
H. R. 4173—813
‘‘(4) withholding or threatening to withhold timely payment for an appraisal report or for appraisal services rendered when the appraisal report or services are provided for in accordance with the contract between the parties.

‘‘(c) EXCEPTIONS.—The requirements of subsection (b) shall not be construed as prohibiting a mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, consumer, or any other person with an interest in a real estate transactionfrom asking an appraiser to undertake 1 or more of the following:
‘‘(1) Consider additional, appropriate property information, including the consideration of additional comparable properties to make or support an appraisal.
‘‘(2) Provide further detail, substantiation, or explanation for the appraiser’s value conclusion.

 

[Mike Kennedy]

http://michie.lexisnexis.com/maryland/lpext.dll?f=templates&fn=main-h.htm&cp=

http://www.msba.org/departments/membership/ethics_hotline.asp

http://www.msba.org/sec_comm/committees/ethics/index.htm

Caveat: I am not a licensed attorney, this info is provided as part of my personal opinion, and should not be regarded as a legal opinion which can only be obtained by an attorney licensed in your state. See my recommendation in green above.

 

[Proactive]

I do not want to return the money because it was a good appraisal. Do not want to waste my time if he files a compliant with the board.

Idaho, and presumably other states, has seen an increase in "value complaints" being sent to the board. I was just reading our board's minutes this morning and was pleased with the number of cases where when the complaints were primarily over value, and there were no significant USPAP violations, the cases were summarily dismissed.

As they should be.

 

[Sue McHugh]

I edited this

 

[Tony V]

Who was the client on this report and what was the indented use of the report..

If this was for lending did they go through the proper reconsideration steps??

Have you contacted the client about this??

 

[saberry17]

Who was the client on this report and what was the indented use of the report..

If this was for lending did they go through the proper reconsideration steps??

Have you contacted the client about this??

It was for a lender, for a reverse mortgage, the management company did submit to me some comps to review which I did & put comments in my original appraisal. I have not contacted the client yet.

 

[Rob Baum]

Are they going to sue the attorney if he doesn't get you to pay?

Then sue the attorney that sued the original attorney if he doesn't pay?

Can't a person get a guarantee anymore?!??? I mean, paying for an appraisal means you get loan money right???!!?? Guaranteed right??


Heavy doses of sarcasm were used in the creation of this post.

 

[Smokey Bear]

Who paid you? If this person wasn't your client, and didn't pay you, even if you you were wrong in your appraisal, you can't 'refund' the fee, since they didn't pay you in the first place. I'm surprised your E&O company won't become involved since you've been contacted by an attorney regarding a potential claim against you. Not sure what to tell you, can't give legal advice.