We’ve observed a new pattern by one national lender. “Risk Management” at this lender has been submitting numerous complaints to state boards based only on single review appraisals which merely indicate “potential violations” of USPAP. I think the lender wants to show that it’s “getting tough” on appraisers. In general, I don’t think the tactic of filing numerous board complaints based on “potential violations” of USPAP indicated by a single review is the right way for this or any lender to show good appraisal management practices. For one thing, the practice may backfire on the lender: appraisers subjected to the tactic may claim that it is being used to intimidate appraisers.

I think the better practice for lenders to deal with alleged appraisal performance problems is for a knowledgeable in-house appraiser (either at the lender or its AMC) to obtain and fairly consider the appraiser’s view without any threatened action; if there are real issues, then the in-house appraiser should counsel the appraiser and give the appraiser specific usable advice as to how performance should be improved. Only where fraud or genuine incompetence is apparent should the lender file a state complaint. Sending anonymous, vague letters threatening appraisers with blacklisting and then using form letters to file numerous board complaints about “potential violations” are not the answer.

The most troubling aspect of this particular lender’s practice, however, is reflected in the lender’s statement in the form letter that: “We are unable to provide any additional information for your investigation.” That’s often false. In several cases of which I am aware, the lender possessed written explanations from the accused appraisers which fairly defended the subject appraisal reports against dubious review appraisals. But the lender withheld this information from the state boards. This is an unfair tactic, especially in those states that don’t inform appraisers of the nature of the complaint against them and keep the identity of the complaining party anonymous.


Peter Christensen

I am an attorney and principal of the Christensen Law Firm. The matters that I handle and the clients whom I serve are focused on valuation services. My work ranges from the regulatory and structural details of providing valuation services to professional liability and disciplinary issues.