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.
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.