Here are the facts regarding the FDIC's recent cases against appraisers:
- The defendant appraisers in the FDIC's lawsuits since May 1, 2012 reside in the following states and localities:
- California: Aptos, Chatsworth, Huntington Beach, Larkspur, San Jose, Tracy.
- Florida: Boca Raton, Bradenton, Estero, Ft. Lauderdale, Hollywood, Hudson, Jacksonville, Lake Worth, Port Charlotte.
- Illinois: Chicago, Skokie, South Elgin.
- Michigan: Detroit, Macomb County.
- Minnesota: Chisago County.
- North Carolina: Union County.
- New Jersey: Bergen County.
- New York: Suffolk County.
- South Carolina: Lexington.
- Washington: Tacoma.
- Four of the appraisals at issue relate to commercial or development properties.
- All of the appraisals at issue were performed in 2004 through 2008.
- All of the claims by the FDIC allege that the defendant appraisers were too high in their opinions of value.
- Several of the appraisers recently sued may not have E&O insurance coverage for the damages demanded by the FDIC because they either now have an E&O insurance policy with an FDIC exclusion (or "regulatory agency" exclusion) or have no insurance covering their prior appraisal work.
- It continues to be the case that the FDIC, almost without exception, only files lawsuits seeking money damages against appraisers for allegedly appraising too high. Though it has a statutory duty under FIRREA to report USPAP violations and other appraiser problems to state regulators, the FDIC files virtually no disciplinary complaints.
Peter Christensen is an attorney who advises professionals and businesses about legal and regulatory issues concerning valuation and insurance. He serves as general counsel to LIA Administrators & Insurance Services. He can be reached at firstname.lastname@example.org.