Industry News
Appraiser off the Hook
The suit against appraiser Pamela Crowley for alleged misstatements on her site, MortgageFraudWatchList.org, was dropped by eAppraiseIT in March 2008. The suit was voluntarily dismissed by eAppraiseIT, which means they can open it again at any time. According to the newspaper Florida Today (February 28), in a court filing dated Feb. 6, 2008, eAppraiseIT said it was dismissing its suit against Crowley because it was “well satisfied” with her acknowledgement during a January 2008 deposition that she never had any personal knowledge of any incidents that would support the postings about the company. “I fully knew what I was doing and they fully knew what I was doing. They just didn’t want all of it in front of the judge,” alleges Crowley. Crowley says she does want it in front of the judge. She and her attorney are putting together their own suit against eAppraiseIT which will be filed soon. Crowley says she plans to go after everyone who is involved in fraudulent activity. Crowley is accepting support. If you’d like to help, you can make checks out to: Eric A. Lanigan Trust Account f/b/o Pam Crowley and send to Eric A. Lanigan, Esq. 222 S. Pennsylvania Ave., #101, Winter Park, FL 32789.
Task Force on Blacklisting
Last issue we told you about a task force created to provide recommendations to the Mortgage Bankers Association (MBA) for placing appraisers and others on “exclusionary lists.” Brad Ellis, Vice President of Valuation Quality Assurance of Indymac Bank, who participated in the report, told WRE last issue that the report recommends the following: that appraisers be notified first (before being placed on an exclusionary list); that they be provided an avenue for appeal and that a separate panel for reviewing complaints be established by the lenders. It also recommends that at least one person on any such panel be a certified appraiser. WRE has been unable to get a copy of the report from any source. John Mechem, Senior Director of Public Affairs for the MBA, says the MBA is not sharing the report. For his part, Ellis said he recommends that appraisers be professional in their responses; that they review their work and if it’s incorrect, admit it and fix the problem. He stresses that no one at any institution takes the decision to remove an appraiser lightly. However, he adds that appraisers do not have any “right” to work for any particular lender.
Appraiser Sues over Blacklisting
California appraiser Jennifer Wertz is suing Washington Mutual, eAppraiseIT, Lenders Services and others in a complaint filed in February 2008. The complaint alleges that she was removed from WaMu’s “proven” appraiser panel for indicating a “declining market” in a report from May 2007. According to Wertz, WaMu had the case moved to Federal Court but a judge granted a motion to bring the case back to state court in April. WaMu attempted to move the venue from California to Washington State but was denied by the court, according to Wertz. Geri Ann Baptisa, a spokesperson for Washington Mutual, told WRE that it is the policy of WaMu not to provide comment on ongoing litigation.
Wertz received many emails from “blacklisted” appraisers who lost their livelihoods for refusing to give in to pressure from lenders and/or AMCs to “make a loan work,” even though heavy hitters such as FHA, Fannie Mae and Freddie Mac announced at an Valuation 2007 and via official statements, that they and their lender clients want to know if a market is declining. “It is in the best interest of every home owner, real estate investor and tax payer to let the appraiser be what they are supposed to be- an objective, uninvolved third party who does not have any personal financial interest in the transaction,” said Wertz. (Read more from Wertz at WorkingRE.com, Premium Content: Appraiser Sues over Blacklisting, and the complaint in Sidebars: Wertz vs. Washington Mutual.)
HUD Approval Process Simplified
On May 5, 2008, HUD dramatically simplified the application and approval process to become an FHA approved appraiser. The process can now be completed entirely online and there is no longer an exam. It is now easier than ever to become an FHA approved appraiser and fulfill FHA appraisal requests.
FHA loan volume is growing and is expected to continue to grow in the foreseeable future. Some forecasts estimate that 30 percent or more of all loan originations will soon utilize the FHA program. For step-by step instructions including links to check your eligibility and to the online application, please see HUD Approval Process.
Cutting Expenses
Why Canceling Errors & Omissions Insurance Can Really Cost You
As business slows, some of you are thinking about cutting expenses by either letting your errors and omissions insurance policy lapse (not renewing) or by canceling mid-term. If you do this, you risk losing coverage for all the appraisals/inspections you completed in previous years. As most every E&O insurance policy works the same way, if you let your policy lapse, you may be left unprotected should a claim arise from a past report. Switching companies is no problem as most provide prior acts free to new clients, as long as you make the switch on or before your policy expires. As most claims take several years to surface, letting your insurance lapse or not renewing could be very costly indeed, should you be without coverage when a problem surfaces. Most companies offer payment plans which can keep your E&O insurance in place. To understand your insurance fully, including a list of “Dos and Don’ts for E&O Insurance,” see Cutting Expenses as Business Slows: Why Canceling Your E&O Can Really Cost You (WorkingRE.com) or call or visit OREP (888-347-5273) – orep.org).