Lender/Client Accused of Fraud. What Effect on Appraiser ?

[Mike Ferrara]

Yesterday an appraiser friend was contacted by a detective about an investigation into one of his lender/clients. Apparently this lender was commiting fraud by using his borrowers information to purchase other properties without their knowledge. The detective wanted to know which appraisals were done by my friend. The appraiser had no knowledge of this and did the reports by all OREA and USPAP guidelines. Values were well supported. Are there any legal ramifications for the appraiser? Has anyone else had this happen to them?

 

[Pamela Crowley (Florida)]

I haven't heard of this here. I hope your friend has a fully signed copy of the purchase/sale contract that was provided to him in all of his files. This seems like the biggest item that could get him.

 

[Mountain Man]

8O Wow, that may be cause for someone to spend some real college time.
I would think that your appraiser friend should be okay as long as his work file is well documented. I would make COPIES of anything the detective wanted, but would not give up my originals (unless so ordered by court).

 

[Ray Ohler]

as long as your friend played it straight down the line and has all the documentation and didn't balloon up the values then he/she should be OK. If they were sales I SURE hope that ALL the documents relating to the sale are in the file, if not, there could be BIG problems. Last time I checked the authorities weren't requiring appraisers to get PHOTO ID. That will probably be the next law passed. Put us in the category of title clerks and notaries. :lol:

 

[Joe Birrell (NY)]

Yes, it has happened to me (more than once, in the past 24 years). Tell your friend, if he has nothing to hide and has been honest, he should go
to the interview and look them straight in the eye, and answer their questions. It always starts with a phone call from some type of investigator (FBI, police dectective, DA, etc.). In spite of knowing your innocent, you still lose plenty of sleep before being interviewed. Given all the fraud going out there I'm surprised that more appraisers havn't been called in for questioning. The investigators need to fit all the pieces together and at this point they don't know how your friend fits. If your honest with them, they'll know it (and visa versa). In all my experiences, the investigators and I got along very well and even shared a few laughs afterward. Oh, one other thing and this came from an attorney friend of mine who retired from NYPD as a Lt. He told me "If your innocent DO NOT LAWYER UP, this makes them assume you have something to hide". It worked for me.

 

[Larry Lyke]

Mike --

Your friend the Appraiser has nothing to worry about.

The Detective is just trying to establish a baseline for figuring out how much the Lender's been stealing. They'll quit digging temporarily once they reach a felony-level charge and can effect the charge.

 

[jtrotta]

Joe, I can go along with everyones input here except, the Not getting an Lawyer part; always seems to me if their looking in your underware for clues, they ain't thinkin your innocent. 8O In most cases your "Guilty" until proven innocent - it ain't the other way, not in the real world :!:

Want the perfect example; OJ

I don't trust anyone outside my family and i mean my immediate
family 8) - oh yeh and don't even waste your time on some Low Rent attorney - get the best, with a proven track record, and plenty of Back Up.

If anyone wants my Trust - you gotta Earn It 8)

Have you ever heard of - guilt by association :?:

 

[bradellis]

M. Leggett,

The appraiser should NOT give his file to anyone- a copy or original, absent a court order. While the client may well be a crook, it does not relieve the appraiser from his obligation of confidentiality.

It would be a real pity if this appraiser gave the detective copies of the files and then got sued by this criminal from his jail cell!

Brad Ellis, IFA, RAA

 

[Tom Hildebrandt]

Brad

I am with you on this one.

I do not care who the goverment or any one says they are investigating, the fact they are asking you for information should just set off some alarm bells.

Your work file is your work file. You should not disclose it except to a regulatory board, peer review (duly authorized) or your client in a RESTRICTED USE report or as a part of the legal process. In all cases, you should never let it out of your immediate control.

In the first three instances, put the individuals in a private room. Never let them take the workfile for reproduction except under your direct control. In the case of a client who did not want a summary of the work in the first place, you should not let him make copies without charging him for them. (why give free data, after all he choose not to pay for the summary or self contained report option)

In the case of the investigator who claims he is investigating "another matter" you should of course cooperate. But that does not mean "giving the farm". An investigator who wants your cooperation and is truly not looking to nail you, should be willing to agree to some basic rules particularly if he does not want to go through the steps of due process (like getting a subpoena). He should disclose what it is that he is looking for and why, he should agree to not take any originals. He should limit his discussions to those issues he has identified. He should be willing to be taped, he should answer some basic questions for the record. He should agree that if you become uncomfortable with any questions asked of you, you can terminate the meeting. If the investigator will not agree to those terms, you can suggest that he actually do what the law requires to protect citizens, get a court order for production.

If he has a legitimate reason for looking at your files, that should be simple. If he does not have a legitimate reason for looking at your files but was on a fishing expedition, then...?

After all, asking our enforcement people to act in accordance with the law should not be construed to being "interference", is is our constitutional right and their professional obligation.

Regards

Tom Hildebrandt GAA

 

[Ray Ohler]

I for one, did not mean to give the file to ANYONE. Answering a "detective" (police detective, private detective, who knows WHAT kind of detective, maybe "investigator" from US Attorney's Office) does not mean to give them the file. Yes, you did appraisals, if questioned, I believe it is in the appraiser's best interest to answer the questions without disclosing any "confidential information". Generalities, not specifics, unless a court order or subpeona is issued.