We see it again and again: AMCs and lenders demanding that appraisers attach E&O insurance information to the back of their appraisal reports. It’s not just a bad idea for the appraiser; it’s a bad idea for the AMCs and lenders themselves because they risk getting themselves dragged into litigation filed by borrowers who sue appraisers. And, it’s pointless because if a lender is going to make a claim against an appraiser when a loan defaults, the E&O policy that will be relevant to that claim a few years later will almost certainly not be the one attached to the appraiser’s report when he or she performed the appraisal.
