Fellow appraisers, Appraisal Scoop sent out a very good article today about appraiser liability which appears to come from the LIA Law Blog. THIS IS A MUST READ! While reading, take note of the last paragraph and note this statement:
"What can appraisers do? In my lawyer, non-appraiser opinion, it comes down again to appraisers supporting professional associations such as the Appraisal Institute and NAIFA to apply organized political pressure. It's not just 'bad apple' appraisers who are being affected by the FDIC's actions -- good appraisers are being entangled too and, if unrestrained, the FDIC will have a negative impact on the profession as a whole."
It is not just the NAIFA and AI, but your local organizations also, like ACOW. If we don’t step up and be involved (pay dues) then these support organizations are going to go away and we will be all alone out here and at the mercy of regulators, lawyers and others. See the [article and link] below.
SUPPORT YOUR INDUSTRY! BE INVOLVED – GET INVOLVED!
Michael A Imes
The Single Biggest Liability Threat to Appraisers: the FDIC
By Peter Christensen
The single biggest liability threat to both residential and commercial appraisers is the Federal Deposit Insurance Corporation. The FDIC held a conference last week in Chicago for law firms interested in representing the FDIC. What came out of that conference made me very anxious for appraisers, but it's much more than just a threat to individual appraisers. What the FDIC is doing hampers the ability of the appraisal profession to deliver accurate valuations going forward. The reason is: if you're an appraiser doing work for a lender (which may or may not be one of the 700+ troubled banks on the FDIC's watch list), you know your risk of being sued by the FDIC for overvaluation in hindsight is eliminated by "coming in low" on the appraisal. That means more loans don't get made.
The FDIC has taken over more than 200 banks since the beginning of the mortgage crisis. When the FDIC takes over a failed bank, it usually sells off the banking assets to an existing lender but retains all of the potential legal claims against the failed lender's directors, officers, mortgage brokers, accountants, lawyers, appraisers, AMCs, etc. The FDIC is now in the business of suing these parties, blaming them for its failed banks' bad lending practices.
The entire article is here.