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More On Hold Harmless Clauses

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Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
I took an assignment from a mortgage broker for a “trouse” or as I prefer to call it a “Hailer.” Yeah, I know, I ought to have my head examined, but a charged an appropriate extra fee and the broker seemed to be more knowledgeable than most.

Anyway, he apparently ran into problems with his original lender, so he changed over to Chase Manhattan Mortgage. So far, no problem, I don’t care who he sells the loan to. One really strange thing was that Chase wanted the report sent directly to their email address from me, not from the mortgage broker– no name change, mind you, just direct transmission. Okay, we can do that; since, my client is requesting it, I see no problem. I re-sent the report to Chase, with a cc to the mortgage broker.

Then the Chase underwriter comes back wanting the new mobile home form. I informed them that it wasn’t a required form at the time the order was placed, I didn’t bid to include it, and that if I do it now there would be appropriate (substantial) extra fee. They decided they didn’t need it. (Imagine that.)

Then the underwriter comes back with wanting a digital signature addendum form. My response was “what’s that?” and the mortgage broker faxed me one that another one of his appraisers uses.

The digital signature addendum form turned out not to be a form at all, but rather a text addendum based on USPAP Statement on Appraisal Standards No. 8 (SMT-8), which was retired in 2001. Okay, no sweat, I wrote an up-to-date text comment, in which I mentioned that Statement 8 is toast, and included it in the appraisal.

That was a couple of weeks ago, so I thought everything was kosher. Then, today I get this “Chase Appraiser Acknowledgment” faxed to me with a request to sign it and send along a copy of my license. (It always kind of gets me that the lazy #$%@&*[email protected]! can’t just go on the net and look up the license. You would think that in the digital age they would just have that page book marked.)

1. This appraisal complies with USPAP, and when applicable, to Federal Housing Administration or Department of Veterans Affairs standards and requirements.

2. The software utilized by Appraiser to generate the appraisal protects signature security by means of a digital signature security feature for each appraiser signing the report, and each appraiser maintains sole control of their related signature through a password, hardware device, or other means.

3. Appraiser is fully responsible for the integrity and authenticity of data and signatures transmitted electronically and will hold Chase harmless from and against any breach or failure of data integrity, signature authenticity, or breach of data security.

4. Adobe's Distiller software or equivalent is utilized by Appraiser to transmit this encrypted .pdf-formatted appraisal.

5. At a minimum, the software contains the following security measures: identifies transmission errors during the transmission process, and confirms date, time and quantity of data transmitted by Appraiser and confirms the transmission was received by Chase, and secures data from editing by means of a password, hardware device, or other means that remains in the sole control of the transmitting appraiser.

6. All such transmissions shall he routed only to Chase at the email address provided in the assignment request at the time the order was placed, unless subsequently directed otherwise by Chase. Appraiser agrees that no such subsequent transmission will result in additional fees billed to Chase, unless agreed to by Chase before said subsequent transmission.

7. No duplicate transmission of this report will be made and no delivery of a hard copy of this report will be made, until appraiser has received Chase's written instructions thereto.

The original was bulleted, but I numbered the paragraphs for easier discussion. Paragraph #1 and #2, no problem. Paragraph #4 and #5, no problem.

Paragraph #3: Wait a minute! I am not a techie security expert. No way I’m going to sign something that says hold harmless if someone breaches security.

Paragraph #6 and #7. Well, since I already breached that by sending the original report to the mortgage broker and cc-ing him (after all he is the client listed in the report) it would seem kind of redundant to say I won’t do it now.

Anyway, I was just wondering if anyone else has seen one of these, etc. By the way, a lot of my stuff has gone to Chase in the past from other clients and I’ve never seen anything like this before. I’m tempted to call them back and tell them where to stick it, but I don’t want to seem to unreasonable. (No way am I going to sign off on paragraph #3, though.) What say you all?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Black out paragraphs 3, 6 & 7.

Put your initials next to each.

Put "As amended by removing paragraphs 3, 6 & 7" next to your signature.

If they don't like it, tell 'em to take a hike!
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Steve:


Sit down while I whisper in your ear: I signed it.

After you pick yourself off the floor let me add: that I do understand the meaning of the word indemnify...


Take a deep breath, and go find your sharpie... I mean something that really blacks out certain offending sections. I will try to find the post where I identified all the sections of that lil form that I erradicated... I also signed my name at the bottom over a hand printed statement that certain sections were 'ommitted by intent'.

Nice of them to require this after the fact isn't it? :sniper:

Redact, REDACT, REDACT.

Last I heard they can't force you to sign.
Last I heard yoru E&O won't cover you ofr a dime if you DO sign!
 

Paul Shraga

Sophomore Member
Joined
Apr 30, 2003
Steve,

I concur with Pam.

For #3, unless they give you a Virtual Private Network to their servers...anything can happen. (Not that it will... but it's the PRINCIPLE!)

-PS
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
You might consider starting to put a digital signature paragraph in your addendum. This takes care of this type of question and is all that we will say on the matter. Here’s mine:

DIGITAL SIGNATURE

THIS APPRAISAL REPORT CONTAINS DIGITAL SIGNATURES THAT MEET THE REQUIREMENTS OF STATEMENT ON APPRAISAL STANDARDS NO. 8 (SMT-8). THE SOFTWARE PROGRAMS USED TO TRANSFER THE REPORT ELECTRONICALLY PROVIDE DIGITAL SIGNATURE SECURITY FEATURES FOR THE APPRAISER SIGNING THE REPORT. THE APPRAISER THAT HAS SIGNED (AFFIXED AN ELECTRONIC SIGNATURE) TO THIS REPORT HAS ENSURED THAT THE ELECTRONIC SIGNATURE IS PROTECTED AND THE APPRAISER HAS MAINTAINED CONTROL OF THE SIGNATURE. PER SMT-8 OF THE UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE, ELECTRONICALLY AFFIXING A SIGNATURE TO A REPORT CARRIES THE SAME LEVEL OF AUTHENTICITY AND RESPONSIBILITY AS AN ORIGINAL INK SIGNATURE ON A PAPER COPY REPORT.

Never, never, never sign a Hold Harmless clause! This is direct from my E&O carrier. If you do, they do not cover you.

Also consider putting a copy of your license in every report. It saves all of those calls that you get asking for copy. Scan it in as a .jpg photo and just stick it in. We never get calls for licenses anymore and since we don’t print 2 copies for each client, who cares about ink.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
Richard, I like your idea about license copy. However, I do a pretty high quality appraisal that often has extra photos, so it's already pretty big. I may consider that, though.

FYI, I will include the following in the reply fax:

See the next page for reasoning for modifications, the following page for the modified Chase Appraiser Acknowledgment, and the last page for appraiser certification (license) copy. Note that current license status for appraisers may be confirmed at

http://www.ASC.gov/content/category1/nr_in...ntro.aspx?id=10

or, you can sign on to

http://www.ASC.gov/

and click the link for National Registry at the upper left hand corner of the page.

By the way, I did put a statement similar to the one you wrote in the original, re-sent appraisal. That apparently wasn't good enough for them. Also, by the way, your digital signature statement is out of date. SMT-8 was retired in 2001, so it does not apply to any appraisal done after that year.
 

Steve Wyrick

Member
Joined
Aug 15, 2003
Professional Status
Certified General Appraiser
State
California
I have been putting a copy of my license in all appraisals for the last 2 or 3 years, for new clients I include a copy of my E & O certificate. But, once a month I will get a call requesting these two items. My response is they are in the report, if you read it they are the pages immediately following the URAR and before the sketch, maps and photos. Please read the full report. Thanks for calling.

I especially like it when the LO calls because the UW sent it back to him as a requirement. LO tell me they have lots of embarrassed UW after they tell them to read the report.
 

xm39hnu

Senior Member
Joined
Jul 10, 2003
Professional Status
General Public
State
Florida
Originally posted by Steve Wyrick@Aug 27 2003, 11:45 PM
... for new clients I include a copy of my E & O certificate.
Bad idea, Steve. When asked for a copy of my E&O, I respond, "On advice of counsel, I neither admit nor deny having E&O insurance."

Some states require E&O as a condition of your certification. So in those, you can't get away with making such a statement.

Reason for the statement is this: If a lawyer knows you've got E&O, he'll take even the most frivolous lawsuit case against you, because he's aware that there's a high probability your carrier will settle to avoid high litigation expenses. If he's unsure, he'll require his fee up front, usually around $2-3,000, before he'll file the action.

Having the "On advice of counsel" in the statement lets the other guy's attorney know that there's a high probability of any lawsuit being vigorously contested.

Using that disclaimer won't eliminate all lawsuits against you. But it <will> keep the feather merchants off the porch.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Had a similiar experience with Chase--they wanted to close on the loan but couldn't until I signed a digital signature statement they faxed me. I kept telling them there alread was a digital signature statement in the original report. So I finally faxed them page 3 of the original report instead of their form. Haven't heard a word since. By the way Statement 8 in USPAP no longer exists.

The paragraph I have in all my reports is as follows, note that after I send it to them it is their responsibility that the loan package (including the appraisal) to insure to Fannie Mae that the appraisal has not been changed (not the appraiser's responsibility).


DIGITAL SIGNATURE:
The software programs used to transfer the report electronically to the client provide digital signature security features for the appraiser signing the report. In the process of transferring the report to the client, the appraiser that has signed (affixed an electronic signature) to this report has ensured that the signature was protected and the appraiser maintained control of the signature. Electronically affixing a signature to a report carries the same level of authenticity and responsibility as an original ink signature on a paper copy report. Per Fannie Mae guidelines in Section 203, a lender may accept an appraisal report that is transmitted electronically. The lender is to represent and warrant to Fannie Mae that the appraisal report was created by the appraiser identified on the appraisal report and that the appraisal report is the complete and unaltered report submitted by the identified appraiser.
 
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