Tuesday, March 20, 2012

The 8 Biggest Appraiser Liability Cases in the U.S.

I have described below the 8 biggest appraiser liability cases with which I am familiar that are currently pending in the U.S.  These are cases that specifically name appraisers, appraisal firms or appraisal management companies as defendants.  That's an important distinction because the appraisal industry has been fortunate that only a small fraction of litigation about financial losses blamed on appraisal deficiencies actually names any appraisal defendants.  Yet, the stakes below are very significant for the appraisal industry because the realistic measure of damages at issue in just these 8 cases -- not the plaintiffs' puffed-up alleged damages -- is more than what the whole industry paid last year for its professional liability insurance on a collective basis, by a factor of 3 or 4.

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Monday, March 19, 2012

FDIC Files First Lawsuit Against Commercial Appraisers since 2009

Updated 5-1-12

In the current lending crisis that began in 2006, by my count, the FDIC has sued 163 residential appraisers or appraisal firms and publicly identified approximately 350 more appraisers as having delivered negligently inflated appraisals.  All of these appraisers were singled out for residential appraisals.  While the FDIC has served many demand letters and subpoenas on commercial appraisers, however, it had not sued any since 2009 until earlier this month.

This new case unfortunately may indicate that the FDIC has decided to start filing more such actions against commercial appraisers.

The full complaint is available to LIA insured appraisers and other appraisers registered with READI at www.readimember.org.  The pleading contains some important lessons for all appraisers, but particularly for appraisers who perform commercial work or those who own or work in firms with multiple appraisers.

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