E&O Binder in reports is DANGEROUS

[BNICK]

SOW and you accepted it

 

[VolcanoLvr]

JTip:

"When scanned it clearly says 'COPY' in the background."

Really? Mine does not. I have never seen a full size copy of a license in the reports I review that says 'copy' in the background.

Sput....
Uh....just cuz some idiot says 'do it', do you, always? Without thinking about what you are doing?

It's fine to provide the license and E&O directly to your client OUTSIDE THE REPORT ..... but please people, don't include those IN THE REPORT. Those items have nothing to do with loan underwriting which is what the report is used for.

 

[Lee Lansford]

Why do appraisers persist in... ??
...

Please people.....think about automatically complying with these stupid requests just because it's in an order form.

For more than a few appraisers, their consideration of a specific condition (be it reasonable or not) of an assignment is no different than if they had been instructed to "Jump!" in that their conditioned response is "How high?"

 

[Calvin the Airedale]

I don't accept low fees or unreasonable turn times.

And I turn down assignments if the manditory requirement is to include the binder page.

It really means the AMC or direct lender is not doing their job.

From the client's perspective, it is easier to have the underwriter check the report for the copy of a license and E&O than to have a separate person ride herd on a large group of appraisers throughout the year.

If I were managing an appraisal department or AMC, I might make the same request.

How, specifically does this increase the appraiser's liability, nobody has ever explained to my satisfaction. Perhaps you can educate me on this point.

 

[Lee Lansford]

...

How, specifically does this increase the appraiser's liability, nobody has ever explained to my satisfaction. Perhaps you can educate me on this point.

Cal, I doubt that including the E&O policy in the report of the appraisal increases the appraiser's liability, but, I see it as an invitation to "please sue me" (sort of similar to waiving a red cape in front of a bull).

 

[Calvin the Airedale]

Cal, I doubt that including the E&O policy in the report of the appraisal increases the appraiser's liability, but, I see it as an invitation to "please sue me" (sort of similar to waiving a red cape in front of a bull).

Being sued is an event attended with expense and aggravation whether you're covered by insurance or not. So if including it increases chance of being sued, then yes it would be a bad thing.

And I understand your impulse that including it may introduce the thought of a suit to whoever feels aggrieved. However, does it actually do that? And does it have that effect, especially on the large financial, GSE and guarantor companies that are likely to engage in such suits?

I don't think it does.

I don't think the presence of the license and E&O exhibits in a report is designed to do anything other than reduce clerking costs for whoever is maintaining the fee panel. All these other users already know you're covered. Does seeing a picture of your binder make them any more or less greedy for recovery or payback?

 

[Dan Umstead]

Being sued is an event attended with expense and aggravation whether you're covered by insurance or not. So if including it increases chance of being sued, then yes it would be a bad thing.

And I understand your impulse that including it may introduce the thought of a suit to whoever feels aggrieved. However, does it actually do that? And does it have that effect, especially on the large financial, GSE and guarantor companies that are likely to engage in such suits?

I don't think it does.

I don't think the presence of the license and E&O exhibits in a report is designed to do anything other than reduce clerking costs for whoever is maintaining the fee panel. All these other users already know you're covered. Does seeing a picture of your binder make them any more or less greedy for recovery or payback?

Calvin, The increased liability is from the borrower and other unintended users. If a lawyer sees the EandO in the report, it is an invitation to sue. The borrower or seller on a purchase may see that you have deep pockets and file a frivolous claim. Most people know that if you have insurance, the insurance company will typically pay off small claims to avoid larger losses.

 

[Calvin the Airedale]

Calvin, The increased liability is from the borrower and other unintended users. If a lawyer sees the EandO in the report, it is an invitation to sue. The borrower or seller on a purchase may see that you have deep pockets and file a frivolous claim. Most people know that if you have insurance, the insurance company will typically pay off small claims to avoid larger losses.

I understand that your position is the "theory" behind not wanting to supply such exhibits. However, there seems no proof that it actually has that effect.

For instance, you claim that if a lawyer see the E&O in the report, it's an invitation to sue. Believe me, if a report is already in the hands of an attorney, don't you think that impulse has already crossed somebody's mind?

The E&O companies advise people not to put these in reports. That advice is more for their benefit than for yours. They'd just as soon by anonymous and invisible till its time to collect next years premium.

 

[J Grant]

I mostly agree with Calvin on this one. It might be a bit of an enticement to sue by the random aggrieved borrower, and perhaps if that is shown to be true, E and O companies would prohibit the use which would answer the whole question. But, since E and O companies take a neutral stance, they must not show an increase. A peeved borrower or agressive atty is going to sue no matter what, unfortunately.

Best perhaps not to take on certain assignments or oddball clients than worry about the E and O inclusion,,,,it is my personal belief, and I could be wrong, that private client work could at times be more of a risk, as private clients think you are working for "them", and should provide the value they "want".

 

[Roy Courtney]

Not just an E&O issue. If an AMC requires an appraiser to crawl on their hands and knees while inspecting the home....there are appraisers that will do it! As a group we are a pitiful bunch! I hope to see it change!