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Uh Oh........they Say They Are Going To Sue Me

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Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
I got threated 3 times by the same person this week that they would sue me if I didn't change the value on their appraisal to support the value of what they thought that the house was worth. :blink:

Back story is this, Decent little High Ranch, about 1250 Sf., nothing special about it, I appraised if for $240K, sent it out, didn't hear anything back, which suprised me since the owner claimed it was worth $400K which was stated on the order form (gulp, can you say "pre-conceived value"). Anyway, Got a call from the loan officer, who told me that there was a $290K mortgage on the house already. I politely informed him that because some other appraiser put a value of that on it, doesn't mean I have to agree with that value. They asked me to consider some "better comps" which they provided. First is a custom built 2,400 sf. Cape, the other 2 are 2500-2700 sf. colonials. :lol: After laughing at the "comps" the provided, I informed them that these weren't good indicators to value, and the appraised value was standing as it was. I am then informed that the borrower is a paralegal, and I will be sued because she thinks I used the wrong comps.

So here in my question.......If I am sued, what kind of damages do you think she will be seeking?? To be honest, I'd just waive my appraisal fee to make it go away, but whatever. Do you think the state will take my certification away since I wouldn't push the value to make the number the lender wanted??

God I love this business............. :yellowblack:
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
If it was me, I would tell the woman to bring it on! then I would counter sue under the laws of NC for trying to coercie, intimidate and others wise attempt to influence my opinion contrary to all appicable laws. I would file a complaint with the end result to her licensing authority.

Basically, if she wants to play hardball then lets just see how big her stones are.
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Stand firm and NEVER waive or refund a fee; it might be construed as an admission of error.
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Sound like the customer has a legitimate beef with whomever may have put them into the $290,000 loan. A good paralegal would go after the person making the fraudulant document creator. He or she would be waisting time with you if your value is supportable - so sounds like a PRESSURE APPLICATION TO ME ;)
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
9 times out of 10 Steve, I'd agree. Problem is, all this woman cares about is getting her Refi. Most people don't care about overspending these days on their homes for purchases, or cashing out ungodly amounts of money since rates are so low. They figure an extra $10,000 on the loan amount will only increase their payments by $50 a month, and "I NEED THAT CASH NOW, NOT 30 YEARS FROM NOW"

Gawd I need to get a new job......
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Boy you've received some very good advice here...the balls in their court, I'd wait and hire an attorney only when necessary.

Additionally, I wouldn't worry about the fact the pressurer is a paralegal. In addition to pressuring you they're using their status in an attempt to rattle you.

I actually had two lawyers threaten to sue me once. My response was to tell them to go right ahead. I've enough confidence in my appraisal and my abilities to stand behind it in a court of law. Moreover, I know & work with some pretty tenacious attorneys myself & if at all possible I'd countersue or file a complaint with the bar association. They were making empty threats & quickly disappeared.

I agree with David's advice not to refund the fee as it just might be construed as an admission of error. If faced with a similar situation I'd say have your attorney contact me, then I'll hire an attorney to handle the situation. You've got E & O Insurance?

Good Luck

-Mike
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
Have had E & O since I stated doing appraisals almost 5 years ago. I don't know how people operate without it. All of my clients need to have it on file, or they won't even touch the appraisals I produce. I've never had a claim filed against it; kinda like health insurance - you never want to use it, but when you need it, I'll be real glad when it's there!!!!
 

Phil Rice

Member
Joined
Apr 22, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
A lawsuit would be a bad thing, but what can you do? Anyone can sue anyone for anything. They may not win, but they can try.

My advice in this situation is to tell the people who are complaining that you are willing to consider any evidence that they might provide (do not let them hear you laugh at their comps), and specifically ask for a copy of the previous appraisal. If at all possible, get a copy of the old appraisal.

If push comes to shove, you want to be able to put the blame where it belongs. A copy of the prior appraisal will be a handy thing to have.
 
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Montana
Never welcome a lawsuit. It is too much trouble and money. At the same time, it is a fact people will try to bully you and make you uncomfortable. Don't fall for their game. Keep your objectivity and sense of humor. Maintain your confidence at all times.

Why not welcome a lawsuit?

1. Most E& O insurance has $1000.00 deductible. While they will defend you no matter how groundless the issue, the first $1000.00 comes out of your pocket. The $1000 deductible does not only apply to the possible award, it applies to your defense at ground zero.

2. In most licensing juristictions your are required to report any legal action against you.

3. When you re-apply for E&O insurance, you have to disclose all the legal actions against you.

4. Some lenders do inquire if you have had legal actions against you.

Things to keep in mind:

1. Never make it personal. Try to remain objective and detached. Threats are annoying and unsettling but it is not about you, it is about the fix the borrower has put themselves into. Treat this the same way you treat any personal crisis, confide in those you trust and use other measures if it really bothers you and starts interfering with your day to day activities.

2. Remember that when people sue you, they think they are so right, nothing will stand in their way. They forget, that if they sue you, you have right to subpoena all their records. They forget you have right to depose them and ask them about their finances, their house payments etc.

What to do?

1. Do report the threat to your E& O carrier and personal attorney. Have at least a conversation with your personal attorney. Have your attorney do a quick check to see if this person has sued anyone before. Sometimes these people sue everyone in sight. Judges are beginning to take a dim view of frivilous lawsuits. One judge even recently ruled if you eat MacDonalds and get fat, it ain't the fault of MacDonalds, they just make Big Macs, not big people...

2. Take a lesson for the future. Add a limiting condition to future appraisals that limit the damage to the amount of the fee. Look into mediation in your area. With this case, keep copious notes on every conversation and maintain a calenar note on every transaction. Back write up notes on the events, everything you can remember about the inspection, making the appointment and anything said while making the inspection or arranging for the inspection. Address these notes to your attorney making them a work product of your attorney. Ask advice on this part as well.

3. Respond in writing, commenting on a property description as you have outlined and the parimeters of possible comparables. Offer to consider any provided that are similar to the property described. Offer to correct any mistakes. Tie this letter to a time frame. Also, offer to review the appraisal that was done previously.

Show me the money!!

An offer of compromise for a lesser fee or a return of the fee is a serious issue. You must consider this in light of USPAP for an appraisal that does not make value is "attainment of a stipulated result, or the occurence of a subsequent event directly related to the intended use of this appraisal." If you signed the cert. you certified that your compensation was not so dependent on a stipulated result etc. In other words, if you return the money, you violate USPAP. Don't let them bully you. There is an issue of privity, that is the borrower is not the client, the lender is. You worked for the lender, they are your client.
 

Leon Stewart

Member
Joined
Jan 15, 2002
Originally posted by MHMerriman@May 3 2003, 12:52 PM
Have had E & O since I stated doing appraisals almost 5 years ago. I don't know how people operate without it. All of my clients need to have it on file, or they won't even touch the appraisals I produce. I've never had a claim filed against it; kinda like health insurance - you never want to use it, but when you need it, I'll be real glad when it's there!!!!
Many Appraisers don't have it. Some believe that having it creates a likelyhood of being sued since they (the sue'ers) will have some way to get paid. If you don't have E & O they can always attach your assets if you have anything in your name, but generally a lawyer will get paid up front from the sue'er(s) if there is no E & O, and generally the sue'er(s) will not want to pay up front since they might not get anything. If the Appraiser has E & O, most E & O firms will usually settle to cut their cost anyway, so the Appraisder will be left with a guilty indication on their record.

leon
 
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