An appraiser we know received a threatening letter and a request for an explanation in regard to an appraisal report he prepared … FIVE years ago. The appraisal was for a $5 million+ home in Ruby Hills in Pleasanton, CA. The loan associated with that appraisal ended up getting paid off in a decidedly painful (for the lender) short sale. And, not having anybody else to go after, the lender chose the appraiser.
They had a reviewer scrutinize the five-year-old appraisal report and go after our appraiser/friend. Our appraiser/friend, fortunately, not only did no wrong, he eviscerated the utterly ignorant reviewer.
BUT, the point is that this is NOT uncommon now. Appraisers know they run the risk of litigation (now more than ever) if they turn a blind eye to anything.
This is why we had an otherwise good appraiser call for a termite report on a relatively clean “As Is” Oakland Hills property this week. He saw things that forced him to go overboard or run the risk of getting de-licensed or sued later on. Appraisers are being held to much stricter standards; they are being held accountable (overly so in many cases); and they are often running scared now.
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