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California real estate appraiser accusations

Apr 23rd, 2015 | By | Category: Real Estate Broker Law

Bureau of Real Estate Appraisers (“BREA”)

Appraisal fraud lawyers

Introduction

Being an appraiser in California is not an easy task.  Buyers are looking for one valuation, Sellers another, and third parties such as banks may have their own interests to serve.  When things go wrong, and you are facing an investigation, audit, or an administrative hearing to defend your appraiser’s license, we are here to help you.

Common Appraiser Accusations

Here is a list of some of the common complaints and accusations a consumer or business owner may make against a California Appraiser:

1.  Criminal convictions bearing on fitness to be an appraiser in California

2.  Violations of USPAP (Uniform Standards of Professional Appraisal Practice) ethics & standards

3.  Violations of BREA regulations

4.  Real estate appraisal fraud & mortgage fraud (often arises in relation to “non-standard” properties)

5.  Failure to provide services as contracted for

6.  Technical errors causing injury, harm or damages

7.   Inaccurate or grossly negligent valuations or value conclusions (ex. fraudulent inflated appraisals)

8.  Inappropriate conduct relating to an appraisal assignment

9.  Falsified information on an appraisal application

10.  Delinquent child support

11.  Discipline imposed by other agencies

12.  FIRREA

13.  Financial elder abuse involving appraisal fraud

These are just some of the violations that can arise.  If you need to discuss your particular situation with us fill out the contact form below.

Types of Disciplinary Actions that BREA may impose on an Appraiser

1.  Fines

2.  Suspension of license

3.  Revocation of license

4.  Public reproval

5.  Private reproval

6.  Requiring taking education units

7.  Impose restrictions on appraiser license

In some case, an appraiser may want to surrender their appraisal license.   Call us to discuss your case.  We are an experienced real estate law firm that has helped a long list of real estate professionals and companies over the last decade of legal practice.

What is appraisal fraud?

Many people think that if the appraiser gets the value wrong they can be held liable for fraud (misrepresentations or fraudulent concealment). However, it is important to understand the role of the appraiser in the mortgage lending process.  Here is an important clip from Graham v. Bank of Am., N.A., 226 Cal. App. 4th 594, 607, 172 Cal. Rptr. 3d 218, 229 (2014):

“An appraisal is performed in the usual course and scope of the loan process to protect the lender’s interest to determine if the property provides adequate security for the loan. Since the appraisal is a value opinion performed for the benefit of the lender, there is no representation of fact upon which a buyer may reasonably rely. “While it [is] foreseeable the appraisal might be considered by plaintiff in completing the loan transaction, the foreseeability of harm [is] remote. Plaintiff [is] in as good a position as … defendant to know the value and condition of the property. One who seeks financing to purchase real property has many means available to assess the property’s value and condition, including comparable sales, advice from a realtor, independent appraisal, contractors’ inspections, personal observation and opinion and the like…. Stated another way, the borrower should be expected to know that the appraisal is intended for the lender’s benefit to assist it in determining whether to make the loan, and not for the purpose of ensuring that the borrower has made a good bargain, i.e., not to insure the success of the investment.” (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1099, 283 Cal.Rptr. 53.).

Attorney Steve Tip: Many California homeowners have approached our office wanting to sue an appraiser for work done over ten years ago.  They mistakenly believe that somehow the appraiser is responsible for their mortgage default and failure to get a loan modification.  I am not aware of a case where suing the appraiser helped leverage a loan modification where the borrower is seeking an interest rate reduction and principle loan balance reduction.

Real Estate Appraiser may be liable to third parties when he knows his appraisal might be relied on

In Soderberg v. McKinney, 44 Cal. App. 4th 1760, 1770, 52 Cal. Rptr. 2d 635, 641 (1996), the Court discussed:

“Applying Bily and the principles set forth in the Restatement, we find no fault with the result in Christiansen. There was no evidence in that case that the appraiser knew his report would be used by third party investors. Indeed, it appears that the appraiser may not have known what purpose his appraisal was intended to serve. It is not surprising, then, that Bily cites Christiansen with approval for the proposition that liability “is restricted to those to whom or for whom the misrepresentations were made.” (Bily, supra, 3 Cal.4th at p. 408, 11 Cal.Rptr.2d 51, 834 P.2d 745.) Thus, we agree with Christiansen ‘s conclusion that the appraiser there was not liable to the investors, given that he “could not have intended that [they] rely on his appraisal.” (Christiansen v. Roddy, supra, 186 Cal.App.3d at p. 787, 231 Cal.Rptr. 72.)

As with every case, a good real estate lawyer can help you closely examine the facts of your case (whether as a Plaintiff or Defendant) and determine what your legal rights, remedies, defenses, and causes of action might be.

Department of Consumer Affairs – BREA Resources

1.  BREA licensing handbook

2.  Real estate appraiser complaint form

3.  List of Appraiser enforcement actions

4.  Consumer’s guide to filing a complaint against appraiser

5.  Common errors and omissions guide

Contact a California Administrative Hearing Lawyer

If you have questions and need to speak with an Administrative lawyer or civil litigation attorney (if you are sued in a civil court) that can help you assess your legal rights and exposure, or to represent you in an BREA audit, investigation or accusation (statement of issues) contact us to discuss our services at (877) 276-5084 or email us using the address on the right side of this page to have one of our real estate attorneys contact you, usually within the hour.  We offer flexible legal fee arrangements including contingency fees, flat rate fees, or a hybrid of the two.  We are here to help!

 

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