Clear Capital / Chase / Field Review

[Eric C]

WHY are they blast emailing retro-field review requests for appraisals from 2003????????? I've seen a few already.

2003????? seriously? For what?

And who's accepting this?

 

[Mr Rex]

There is no statute of limitations on fraud. Others will argue that the SOL refers to the time when the fraud should have been discovered with due diligence (and within the USPAP required 5 year record keeping period). Fannie and FDIC have proven this line of thought erroneous and won cases back 10 years plus.

 

[Tim Hicks (Texas)]

$125 fee???

 

[Terrel L. Shields]

There is no statute of limitations on fraud.

Wrong!!! The FDIC alone can add 2 yr to the SOL after they have taken over a bank.

Fannie and FDIC have proven this line of thought erroneous and won cases back 10 years plus.

Cite one...just one. Now if you tried to conceal the fraud the SOL can be tolled. [url]http://appraisersforum.com/showthread.php?t=191947[/URL]

That first case? I know a lot about it. I was the appraiser who claimed the statute of Limitations had run out and it was court tested in Federal Appeals court. It is "case law" and not infrequently cited in other cases.

 

[Mr Rex]

Did you read the cases the appraisers lost?http://appraisalnewsonline.typepad.com/appraisal_news_for_real_e/eo_errors_omissions/

 

[Terrel L. Shields]

Not in that link...that's 7 they won.

You have to argue for it. You have to not have concealed it. That's another issue.

 

[Noreen]

Terrell, in your case was it because there was no fraudulent behavior and the SOL? I know you have referred to this as a living hell time period and let's face it, you are not the fraud type.

 

[Terrel L. Shields]

The issue of "behavior" never gets brought up. I appraised a farm 6 years prior to the farmer going under. He bought the farm from his cousin. I was asked to appraise it AFTER the sale actually closed and I had a copy of the deed in the report. The bank had forgot to order the appraisal. They knew the seller was going under so they agreed to the deal. They actually loaned more money than I appraised it for but their idea was they were already in so deep with someone who wasn't going to hack it, well...?

The plaintiffs argued that they "relied" upon the appraisal even though it did not exist (not that the judge ever knew that) and that they were "enticed" into the poultry contract by the "fraudulent" appraisal. The mechanism according to their complaint was that the bankers must have told me how much to appraise it for. But because the bank and poultry company were basically owned by the same family, the plaintiffs claimed the town was "afraid" and so they could not offer any evidence of a fraud or that I was doing their bidding. I plead separately from the bank and poultry company who were using the same lawyers. We argued both privity and SOL, and that there was no reason to toll the SoL and that the plaintiffs, since they claimed to have relied upon a document that clearly stated it was only for the use of the bank and everyone else should relied upon their own experts.

The judge ruled that they lacked any evidence to toll the SoL. They had legal access to the appraisal. Thus it was not concealed. They "suspected" a fraud according to their complaint so the court ruled they had a due dilgence to pursue those suspecions at the time they first thought this was a "bad" deal. So they appealed to Federal Court.

As the court said

In order to toll the statute of limitations, there must be a fact question of "some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff's cause of action concealed, or perpetrated in a way that it conceals itself." ​

Martin v. Arthur, 3 S.W.3d 684, 687 (Ark. 1999) (citations omitted). Where affirmative acts of concealment by the person charged with fraud prevent the discovery of that person's misrepresentations, the statute of limitations will be tolled until the fraud is discovered or should have been discovered with the exercise of reasonable diligence.​

​

​

Nothing was concealed by the defendants. The plaintiffs had signed the contracts, the mortgage and an agreement with the bank. In fact, they made a living out of the place for six years, but did not cooperate with the poultry company until the company simply refused to put birds back in their barns. They would do things like run out of chicken feed because they were lax in keeping tabs of how full the bins were. This stresses birds and, of course, they don't grow as fast as they should.​

 

[sputnam]

A retrospective review is a legitimate request of an appraiser. Why all the drama about it? Accept it or not. Quote whatever fee you want.

 

[Terrel L. Shields]

a 10 year old retrospective is likely used to defend the bank against Fannie mae or FHA trying to "claw back" the money by claiming the original appraisal was flawed. If the reviewer finds issue then the bank can go after the appraiser (in theory) and if they can support the original appraisal then it is an argument with fannie and /or whomever that, in fact, the loan was made in good faith and the appraisal was trustworthy.

So the review is not necessarily a fishing expedition on a "bad" appraiser rather an attempt by the bank to defend itself. They are not ordering these reports in a vacuum, rather have an explicit reason to order them.