7 Reasons Why Borrowers Shouldn't Sue Appraisers

"Should I sue the appraiser?"  We see hundreds of cases filed against real estate appraisers by borrowers/property owners, variously claiming that an appraisal for a loan was either too high or too low.  This is my observation as lawyer who has seen hundreds of cases filed by borrowers: it is generally a waste of the borrower's time, emotional energy and money to sue an appraiser.  Based on my experiences, I've found that:

• Most claims by borrowers against appraisers are unsuccessful and result in no monetary recovery for the borrower.  In other words, the borrower loses.  Part of the reason for this is that the borrower is not the appraiser's client in appraisals for mortgage lenders and the stated purpose or "intended use" of the appraisal is for the lender's evaluation of a mortgage transaction.  A borrower is always free to engage their own appraiser for their own intended purpose.

• If the borrower's claim is that an appraisal was "too high" in 2003-2008, judges and juries usually recognize that real estate losses are more likely the result of the declining real estate market and not legally caused by the appraisal. 

• If the borrower's claim is that a current appraisal is "too low," judges and juries usually realize that appraisals in the current real estate market are often lower than what a borrower or property owner may desire.

• The appraiser's opinion of value is usually defensible as of its effective date.  An appraisal is not a guarantee of present value or a prediction of future value.
  

• A borrower who loses a lawsuit against an appraiser can be held financially liable for the court costs incurred by the appraiser.  These costs can be several thousand dollars and, in some cases, much more.

• Filing a lawsuit can negatively affect an individual's ability to obtain a mortgage loan or employment in the future.

• If a borrower provided false information when applying for the loan (such as about income or occupancy of the property), the borrower's fraud will likely be exposed during the lawsuit.  Lies will be discovered.  Mortgage fraud is a felony for which borrowers have been prosecuted.  See www.mortgagefraudblog.com.

If you're a borrower and you've read this far and still think you have a good case, please feel free to email me at peter@appraiserlaw.com.