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New Assignments--double Jeopardy

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Jan 16, 2002
Claim #1 scenario is good reason why we shouldn't be
doing drive-by appraisals. On the other hand, who reinspects the interior on updates ?! hmmm - sounds like a good reason for not doing updates :eek:

Claim #2 hire an architect if you want accurate square footage. B) Did an inspection the other day and the subject has 14 turns on the exterior walls and varied from 1.5 to 3 storys with room count of 12/6/4.5 -
that's why my sketch is labled in bold print "for illustration purposes only - measurements shown are best approximations possible " - 95% of time there is no survey available - which is yet another pet peeve of mine -you know "survey, what's that ?" - how many times have you heard this from property owners and others. I've also seen surveys that are wrong!! - just I'll have to sue the survey guy :blink:
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Been preaching for 6 years that the lawsuits will be the most crippling affect on Appraisers & the ones that most likely bring a lawsuit against U is the one you did the FAVOR for. Rember your files are for 5 years an RE Agent is 3 & the one that creates the problem only keeps them for one year & has almost no liability IF your in a area that values are going down be sure your charging enough to have the best E & O coverage available & get to know a GOOD Real Estate lawyer.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Jo Ann, ..... Thanks again for sharing good and useful info to help us all. That company is my carrier, and I have perused their Claim Bulletins before and yet it is very good to read through key ones once more ! I picked up on 2 prime lines to be sure to insert within my USPAP-Addendum page in each report in the future.

On another matter, however, I will pose some general statements to those who have already entered this thread, and more who may follow. There is commentary in most alerts referring to "3rd party". I will assume party #1 is the appraiser and party #2 is that sole, prime client/user mentioned by the appraiser in his/her cover page, engagement letter or closing addendum page. Therefore party #3 becomes that next one ( or the second-next one ) in a likely sequence of re-directions and distributions of a loan file (and my report within) after it has been submitted to that original and prime client. Likewise, the suggested remarks that we should make are referring to.....NO 3rd party being able to rely on our report for any purpose (other than originally intended) WITHOUT THE WRITTEN CONSENT OF THE APPRAISER. Do any of you guys EVER get WRITTEN consent for another and extended use of the report ?, ie. when another entity inherits (buys) a loan. I am never informed of ANY third party to whom the loan (and my report) have been "sold" or forwarded. For those of you who have been inserting the "...without written consent..." line do you ever get any written requests for consent ? From all Forum replies and the examples of scenarios posed by an E & O carrier those future surprises and claims always eminate from a person, firm or entity who the appraiser never directly knew was in possession of the report ! What say ye ?
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
OK, I understand the problems, and why the suits are being filed, but here are my problems with BOTH situations......

1.) The client had apparently ordered the second appraisal as a drive-by. For that reason, the appraiser cannot possibly know anything about the condition of the subject property, except for what is disclosed in the public records for the subject. Even if he has prior knowlage of the subject's condition, that should not enter into the opinion of value for a current appraisal. If a client is stupid enough to lend on a property based on an appraiser simply driving by the home, that is their stupidity. Typically, E&O companies will work quickly to settle a suit, and make it go away rather than litigate it, as the courts cost MUCHO BENJAMINS (for Trotta!!).......and it's simplier and easier to just pay the greenmail charges than fight for what is right.....

2.) From what I am seeing, the owner (who was never the client) is going to sue the appraiser for a report that he never was entitled to. Again, it will be settled, and won't be right.......Think about it. It is the new buyers responsibility, and the responsibility of their RE agent to do their due diligence to find out any and every problem with the home PRIOR to the purchase. The story is a bit incomplete, as it doesn't state what the "correct" GLA is, nor does it disclose where the new owner got the "correct" GLA, but it's still not the appraisers responsibility to disclose ANYTHING to a borrower when doing an appraisal for a mortgage lender.

Maybe I'm wrong, and looking at things through rose colored glasses, but E&O companies should start actually fighting these battles, rather than just settling suits because thats the easy thing to do.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Originally posted by MHMerriman@Aug 6 2003, 05:35 AM
Maybe I'm wrong, and looking at things through rose colored glasses, but E&O companies should start actually fighting these battles, rather than just settling suits because thats the easy thing to do.
You incurable optimist you! :rolleyes:

Actually there are some few companies who DO fight such nuisance suits on the basis that it better serves them and their clients not to go out of pocket and keep charging their cleints' (um that would be us. folks) more to cover those losses... which can really add up over time!

or so I've heard... <_<
 

Pat Butler

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
That drive by appraisal should have had a lot of 'assumptions' in it regarding the condition of the subject property. Apparently the appraiser assumed certain things but did not disclose that he/she was making assumptions.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Talk to your Insurance CARRIER not just an agent Especially CLAIMS Division see how many are filed on a daily basis, cost to pursue, cost to settle, ETC U will find that many never hit the open market. Go up on the cost of an Appraisal & buy the better coverage. Any one of us may need it in the near future.
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
I don't perform drive-by appraisals--never have. This is my 30th year, and I have never been to court to testify on my behalf.
 
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