SuggestionsWanted.

[NancyG]

Being sued for Fraud.
Specifics are.....
Home owner bought home in 2005 and refi'd in in 1/2007 after totally updating and redoing all aspects of home. I'm not taling about a little paint job and new electic plates. I mean new kitchen, floors, baths, upgraded electric, c/air, deck, finished basment.
I did the appraisal and I used 5 (FIVE) comparables that all sold within 6 months in the same town. The value came up. Well, they closed and cashed out. Turned out they borrowed like 96% of the value I appraised it for( nice creative financing). In October of 2007 they went to sell the home and found that they couldn't sell it for what they owed. Now that they are being forclosed on they are suing the morgage co, the lender (Bank), processors, secretaries they spoke with, the title co and my appraisal company. They do not accuse neglegence just fraud. I had no relationship with the loan officer or the mortgage company. I can honestly say I had not done any work for this company more than 3 or 4 times.
My E & O does not cover fraud.
I make too much money to get a public defender because I file joint tax returns with my husband, but......
I cannot afford a private attorney who wants a $10,000 retainer.
I'm forced to defend myself.
I have never been accused or anykind of wrong doing. I'm sure I could parade a ton of character witnesses on my behalf, but If anyone out there has any experience or ideas I am more than willing to listen.
Please help if you have any suggestions,
Thanks

 

[Soar Ohio]

Call your E&O company. They should defend you unless fraud can be proved.

 

[Randolph Kinney]

A civil fraud typically involves the act of intentionally making a false representation of a material fact, with the intent to deceive, which is reasonably relied upon by another person to that person's detriment.

One thing you might consider in your defense is to get a review appraisal of your appraisal by someone that is not familiar with you and is truly independent of all parties in this suit. If that review appraisal comes in clean, you could take it to your E & 0 company and ask them to defend you. They may not pay out for a claim if the party suing you can sustain a verdict of fraud.

Just curious what, if anything, about your appraisal do you believe that you are being sued?

 

[Greg Bell]

I was sued by an old lady who's said we cheated her on her loan.It was a hard money loan.She had a free lawyer from some tax payer funded law office.I went to court about 5 times by myself and they finally just dropped the case and it never went to trial.Most of these suits are frivolous and usually get dropped down the road by a judge with common sense.

 

[TJSum]

It sounds like they are just fishing. I have talked with real estate attorneys recently and they say this is rather common place. They just name everyone and anyone involved on the lawsuit trying to find gold somewhere. Are you sure your E & O will not cover you, being accused of fraud is much different than actually committing it. I never heard of cash out refi's that allowed 96%, even in the best of times, but who knows, we are just appraisers. What a great country, the HO can accuse others of wrong doing and sue for damages, but yet they are the ones who benefited if, in fact any fraud took place.

 

[Michigan CG]

They took out a loan. They were happy to sign the papers at the time. They knew the monthly payment and were ok with it.

Then they try to sell in a down market? House value dropped, so did everyone else's.

Now they are in foreclosure? They quit making payments? Couldn't afford the payments they agreed to? Had an adjustable rate?

The mortgage company and bank have high paid attorneys. Bet it gets dismissed.

 

[NancyG]

Frivolous indeed. An Attorney that does free consultations took the case that I believe that she's looking for settlement.
The plaintiffs allege fraud in the inducement and violation of the Consumer Fraud Protection Act. They allege that I inflated the value.
Tom, E & O wrote me a long letter stating they will not defend me.

 

[ZZGAMAZZ]

Why Did the Carrier Abandon You?

Get on the bandwagon and hire a lawyer to sue your insurance company?

How could the insurance company refuse to represent an appraiser client who is being sued for fraud if the fraud allegation has not been tested? Is it possible that the carrier reviewed the allegations and the appraisal and find that the appraisal has the potential for fraud?

This concerns me because I don't understand the nuances of my own policy or the E&O industry.

Thanks.

 

[Kevin A. Spellman]

They say your report is inflated. Do they have a value to demonstrate the inflated value? Is there a complaint against you with this report with the state licensing authority? Was the property formerly listed and market tested? Go to the auction for the foreclosure and see if the investor takes the property or it sells to a private individual. Make sure you now the auction price. They need to clearly demonstrate their damages to get a judgment.

 

[TEL2002]

Are they looking at a true and accurate copy of your report....or maybe an intentionally altered report? Or maybe a report that was modified by some 'system' in the process of delivery to a client. Or are they just guessing and do not even have a copy of your report?