E&O Binder in reports is DANGEROUS

[JTip]

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.

If you scan/copy a Pennsylvania license (they use the same license 'format' for all professions including appraisers, RE salespersons/brokers, doctors, pharmacists, attorneys, etc.), a repeating watermark magically appears in the background of the copy/scan.

 

[KD247]

... I see it as an invitation to "please sue me" (sort of similar to waiving a red cape in front of a bull).

...Most people know that if you have insurance, the insurance company will typically pay off small claims to avoid larger losses.

Absolutely. The consumer (the borrower) would be my biggest worry. Imagine if a travel agent included a copy of their E&O every time they delivered tickets.

Try calling up the AMC and telling them that the lender would probably also like a copy of their proof of insurance. I'm sure they'd find some way to wiggle out of it.

Actually, I think it would be a good idea for appraisers to have password protected, encrypted, watermarked, read-only copies of their appraisals available on-line so that a reader can verify that they are looking at a true copy. This would also be a good place to put heavily watermarked copies of the insurance binder and appraisal license. Just to keep those documents out of the hands of the consumer.

 

[VolcanoLvr]

Methinks many of the responders are not thinking this issue through very clearly.

Exactly what does the E&O binder have to do with the underwriting of a loan? Actually nothing....although it might be a checkbox item on some stupid U/W review form.

Similararly, what does including a FULL SIZE copy of your license have to do with loan underwriting? Actually nothing.....because your license info is on the signature page (in case none of you and certainly many AMC's and Lenders have never noticed that).

It is primarily the second and third tier AMC's and Lenders who ask for these items. These are frivolous requests. Just Say No!

If you don't get the order or they refuse to work with you, then I can virtually guarantee you won't want to work with the company anyway due to other stupid stuff they will do to mess up your day.

 

[Roy Courtney]

Methinks many of the responders are not thinking this issue through very clearly.

Exactly what does the E&O binder have to do with the underwriting of a loan? Actually nothing....although it might be a checkbox item on some stupid U/W review form.

Similararly, what does including a FULL SIZE copy of your license have to do with loan underwriting? Actually nothing.....because your license info is on the signature page (in case none of you and certainly many AMC's and Lenders have never noticed that).

It is primarily the second and third tier AMC's and Lenders who ask for these items. These are frivolous requests. Just Say No!

If you don't get the order or they refuse to work with you, then I can virtually guarantee you won't want to work with the company anyway due to other stupid stuff they will do to mess up your day.

Great post! Gee what would happen if NO appraisers anywhere accepted the AMCs assignments? I guess the AMC would just do all these appraisals by themselves?

 

[Calvin the Airedale]

Methinks many of the responders are not thinking this issue through very clearly.

Exactly what does the E&O binder have to do with the underwriting of a loan? Actually nothing....although it might be a checkbox item on some stupid U/W review form.

Similararly, what does including a FULL SIZE copy of your license have to do with loan underwriting? Actually nothing.....because your license info is on the signature page (in case none of you and certainly many AMC's and Lenders have never noticed that).

It is primarily the second and third tier AMC's and Lenders who ask for these items. These are frivolous requests. Just Say No!

If you don't get the order or they refuse to work with you, then I can virtually guarantee you won't want to work with the company anyway due to other stupid stuff they will do to mess up your day.

No, you're not thinking like a chief appraiser charged with running the appraisal function for a large lender or AMC. You've been given limited resources and budget to accomplish all that is required of you.

If you're a regulated lender, one of those requirements is make sure everyone is licensed or certified. You also have a lending policy that requires everyone doing work to be insured for E&O.

What will cost the least: devoting a third of a clerk's full time wages & benefits toward riding herd on a large panel of appraisers; or routinely requiring the appraiser to supply such proof for every assignment (allowing underwriting to check for it during the normal course of business)?

Not everything is some deep sinister plot to make appraiser's lives miserable or increase their liability.

This is not an onerous request on the part of clients and I'm more than happy that some of you are tempted to simply decline the work of such lenders.

 

[J Grant]

My experience with this is that the smaller AMC's ask for this that have "smaller" clients...the local/regional credit unions/banks that you guys always tout as the alternative to big bank lenders. For better or worse, a lot of these small lenders assign through AMC's.

My guess is that for the AMC, because their client list is far more diverse than a lender affiliated/owned AMC (who is the client), that perhaps it is a management tool as the reports are sent to small institutions all over the country.

Bottom line, I am not crazy about the request, but the small number of AMC's that ask for it seem pretty solid.

 

[Mr Rex]

Appraising for a living is dangerous. The idea that someone is more likely to sue you because you include your E&O in the report is naive. The best way to stay clear of suits is to say what you do, do what you say, and have the paperwork to prove it.

 

[Metamorphic]

Actually, I think it would be a good idea for appraisers to have password protected, encrypted, watermarked, read-only copies of their appraisals available on-line so that a reader can verify that they are looking at a true copy. This would also be a good place to put heavily watermarked copies of the insurance binder and appraisal license. Just to keep those documents out of the hands of the consumer.

Alamode has something like this with their SureDocs system.

It puts a blue box around your signature with a code number it it. You can go to an alamode website, put in the code number and get a summary of the crucial elements of the appraisal...not the whole thing, but just the big things that somebody fraudlating appraisals would likely want to change.

 

[BRCJR]

Appraising for a living is dangerous. The idea that someone is more likely to sue you because you include your E&O in the report is naive. The best way to stay clear of suits is to say what you do, do what you say, and have the paperwork to prove it.

But that is way too practical....Your solution makes it too easy...

 

[TJSum]

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 agree with this concern, it could plant a seed in a borrowers mind. Most clients keep a "file" on each appraiser they work with, whether it is the lender or any AMC, let them keep this info in the file and leave it out of each report.