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What's My Liability?

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SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Recently I had a field review assignment where the appraiser did not inspect property (per his own comments in the appraisal addenda) but signed it anyway (he's the only signature on the report). He had a trainee do all the field inspection and states that he did all the research and analysis of the report, only thing he did not do was inspect - yet he signs!

According to our State guideline and USPAP the signing appraiser must have also inspected the property.

Now before we all get bent out of shape about USPAP, etc. here's my question: If I file a complaint against this appraiser and his license is revoked or suspended, am I liable in civil court to his loss of wages or worse future potential earnings? Is it worth it to file a complaint if all it does is sue the hell out of me?

I run a very reputable and honest business. Should I even meddle with this? :eyecrazy:
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
george,

First this is a question for your attorney. Having said that I am one of those who picks his fights carefully. I have to earn a living, so I cant whine, b_tch, complain about every dumb_ss appraiser out there or I would be broke. I do turn them in occasionally, but its because of out and out fraud, or just plain lying.


Think about it!
 

SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Originally posted by Andrew - Charlotte@Jun 15 2003, 07:42 PM
First this is a question for your attorney.
Andrew, thanks. I know I'm debating about sending my attorney an email. But at $260/hour, I wanted to know about others here in the forum having experienced this sort of backlashing or process of complaint filing. Since California leads the nation (and probably the world) in lawsuits I'm not one to stir a hornet's nest.

On the other hand, what constitutes fraud?

The appraiser did not go out to the property. The appraiser ignored 3 sales and 4 listings in the complex (it was a condo BTW), but chose to go 3/4 miles out for sales that were over 6 months old.

And here's the kicker... 6 years ago he was fined and reprimanded by the State for similar USPAP violations. I just don't want to be the guy that puts the final nails into his coffin and then gets sued.
 
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Buysiness decision George.

This is one reason I advocate everyone from the person who orders the appraisal to the person who uses the appraisal having some responsibility under USPAP.

George. You have to work in the area and you have to work.

Whatever you do, you have to be able to look in the mirrow in the morning.

Sometimes we have to consider our well being ahead of the public good. If this appraiser has already been reprimanded, he/she will probably continue to produce faulty appraisal reports.

Again, I say. You have to do what you can live with.

This is the main reason I don't do reviews. Dealing with the faulty report and the state enforcement boards must be dealt with in USPAP. We must have guidelines and requirements that make it a given and not a business decision.

If a reviewer finds a report fraudulent and/or in violation of USPAP said appraiser should be required by USPAP to report the fraud and/or violation to the state enforcement board. The only question then would be one of fact. Was the report actually fraudulent or in violation.

Additionally, the loan officer, mortage broker, end user, etc should also be required to report the fraudulent and/or violating report to the state enforcement board. The reviewer's report should be provided to the enforcement with the faulty report. Everyone involved should be made aware by the board after a "quality" review of the original report, the reviewer's report, and the history of the alleged fraudulent producer.

I believe USPAP now requires that. But, that is my interpretation. USPAP is not clear on the question.

There are no guidelines in USPAP on how or when to report it.

As practiced now, many reviews are requested to provided support for a loan officer, mortgae broker, etc trying to justify a value that will put his/her deal together. Reviews are seldom requested to prevent fraud and promote honesty.

Hope this has helped you make your decision. I do not envy you or your position.

Please join me in a prayer for those who are protecting our freedoms.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I just don't want to be the guy that puts the final nails into his coffin and then gets sued.
George, I understand being gun shy in the most litigious state of the union, but all I can say is do your job with extra care, and documentation. Review the appraisal......... NOT the appraiser. If he files a silly suit over you doing your job, protecting your clients interest, then go back after him with all guns blasting.

Filing a suit and arguing successfully are two different things. If your neighbor doesn't like the color of you car, they can sue you....... it doesn't have to make sense. But that is the judge's job, to through out frivolous suits.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
According to our State guideline and USPAP the signing appraiser must have also inspected the property.

Where in USPAP does the appraiser have to inspect the property? You must have a thorough state law, as ours basically only requires the standards set by USPAP.

chose to go 3/4 miles out for sales that were over 6 months old.

In my area, that still would be considered within a neighborhood. Obviously, if near identical properties were sold nearby and the subject value was inflated by ignoring the nearby properties, you can make that case. Older sales would tend to deflate in a normal inflating market, right?

I sure would hate to make that case, lose before the Board, then be sued for interfering with commerce - a pretty serious charge when made.
 

Damon Young

Sophomore Member
Joined
Jun 15, 2003
In my state (Colorado) and others I am familiar with, it is perfectly acceptable for the Supervising Appraiser to NOT personally inspect the property, as long a:
1. He/she states that they DID NOT do the physical inspection,
2. the co-signing trainee DID DO an inspection, and
3. the Supervisor assumes full responsibility for the appraisal's accuracy.
 

SmilingDog

Member
Joined
Apr 22, 2003
Professional Status
Certified Residential Appraiser
State
California
Terrell check out this link OREA Spring 2003 Newsletter GO TO PAGE 5. Also I did not want to make this a USPAP interpretation discussion, but based on the facts, I believe that the appraiser has violated at least some portions of Standards 1 and 2.

in a condo porject with at least 7 comparable sales or listings why on Earth would you go out 3/4 miles and 10 months back? It doesn't make sense unless you're a number pusher. BTW - the sales and listings in the project are near identical model matches...

Damon, the Appraiser signed the report (on the left side) AS IF he had done the inspection. The Trainee did not sign, and in my State that's a violation. The TRainee should have signed on the left and the licensed appraiser on the right as a Supervisory appraiser checking the box DID NOT inspect the property.

How is this different in any other state is beyond me, but's pretty crystal clear here.
 

Lee SW IL

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
If you have any question on turning in an appraiser, call the office that issues your licence. You should be able to ask them any questions and have a better understanding on what they want/need.

I call the IL-OBRE without hesitation. Will talk with the director at our upcoming NAIFA montly meeting in next week.

Get to know your officials, it can't hurt.
 

Frederick R. Ruffell

Senior Member
Joined
Jan 21, 2002
Professional Status
Certified General Appraiser
State
California
George,
I urge you to turn this guy in. He obviously has NOT learned his lesson, i.e. that he needs to know the rules if he wants to participate in this business. He is making us all look bad :twisted: This one hits close to home for me as I too appraise in Southern California. :angry:
 
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