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Real Estate Advisors Defense Institute

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In 2013, many lawsuits against both residential and commercial appraisers continue to relate to appraisals performed years ago at the peak of the real estate price bubble, 2005 to mid-2008. These lawsuits are filed by borrowers, lenders, investors or the FDIC and typically allege that an appraiser’s inflated value resulted in the plaintiff borrowing, paying or loaning too much money. The plaintiff blames its loss on the appraiser and sues for damages. When reporting a claim like this to o... [More]
The review below was first published on April 22, 2011. In mid-June 2011, LandSafe released a very slightly revised version of its contractor agreement. As far as our review, the only relevant change is the addition of the wording "except as otherwise prohibited by law" at the beginning of section 14.1 regarding indemnification and some very minor edits. The new wording in section 14.1 enables LandSafe to contend that this section of the agreement no longer violates [More]
Updated 5-1-12 As we first reported on the Appraiser Law Blog, within the last month, the Federal Deposit Insurance Corporation filed its first lawsuit against a commercial appraiser since 2009.  This article is about the full story alleged by the FDIC in that lawsuit and a few important lessons that appraisers might take away from it.  While the alleged appraisal mistake made by the appraiser who prepared the report was simple, there are more far-reaching liability prevention lessons... [More]
This article is from the March 2012 issue of the LIA Risk Report Appraisal Management and Lenders Services.  It is directed to AMCs but may be of interest to appraisers who contract with AMCs. Many lenders are requiring that AMCs provide extensive representations and warranties in appraisal service agreements in order to receive appraisal work. These “reps and warrants” may involve the AMC contractually promising to the lender that appraisals delivered by the AMC’s panel appraisers will co... [More]
This article is from the March 2012 issue of the LIA Risk Report Appraisal Management and Lenders Services.  It is directed to AMCs but may be of interest to appraisers who contract with AMCs. Most of the discussion of liability issues in this LIA Risk Report has concerned appraisals performed by licensed or certified appraisers. Financial losses and liabilities, however, do arise from alternative valuation products and we will cover these risks in future issues. For now, here is one case.... [More]