Many appraisers have stated serious concerns with respect to the conflicting directions given by Fannie Mae regarding the addendum and the additional strain of the research and analysis -- all in an AMC-dominated environment paying lower fees to appraisers.
In our position of defending legal claims against appraisers, we worry most about the liability
risk to appraisers. To minimize such risk, we are suggesting that our insured appraisers first be careful to address any specific concerns they have concerning the market analysis in the bottom explanation section of the addendum. It is always the best practice to accurately communicate specific concerns about data reliability or other matters in the relevant part of the subject report.
Beyond that basic prudence, we are suggesting that appraisers consider adding the following language or similar language they deem appropriate in the same explanation section:
Appraiser’s "Inventory Analysis," "Median Sale & List Price, DOM" and other observations in this addendum are based on the data source identified above, which appraiser generally believes to be an acceptable source of market data. However, the appraiser cannot verify all of the information in that data source and cannot guarantee the accuracy of such data or conclusions based thereon. The appraiser also cannot guarantee future market conditions affecting the subject property.Because of the recent implementation of this form, we do not know whether lenders will push back or react negatively to including this language in appraisal reports. We look forward to feedback from appraisers on this issue -- please feel free to email me.
The loss prevention section of LIA's website (www.liability.com/loss.html) contains additional loss prevention information.
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