Financing in Saint Cloud>Question Details

Runetodda, Home Owner in Saint Cloud, FL

If I found evidence of fraud on my appraisal, can I sue the appraiser/appraisal company?

Asked by Runetodda, Saint Cloud, FL Wed Jan 26, 2011

I believe my home appraisal was seriously flawed–the appraiser claimed my 4 bed/2.5 bath 1660 sq ft home on 6 acres that I bought for $342,000 in July 2005 had fallen in value to $145,000. All of my arguments/comps were rejected by the appraisal company and bank that owns it. For example, I asked how a nearby 5 acre field sold for $177,500…did my home and extra acre DECREASE my property value by $32,500 compared to a barren field? They refused to say and I discovered at least two examples of deceptive arguments used to reject clearly superior comps. The Certified Fraud Examiner of the Osceola County Property Appraiser Office reviewed my appraisal and found a long list of serious flaws. Based on my evidence the Florida Department of Business & Professional Regulation has agreed to review my appraisal as well. Let’s say a person found evidence that an appraisal company (and its parent company) used deceptive arguments to back up a poor appraisal…what can a person do against such giants?

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To prove fraud you would need to show how the appraisal company gained in some way by doing it. Normally fraud is tough to prove. It sounds like your mind is made up and you have picked a direction to go, so you don't need us. I am sure the next 10 people will say -- see a lawyer.
2 votes Thank Flag Link Wed Jan 26, 2011
Yes you can sue, but understand that anybody can generally sue anybody else. The goal is to succeed and prevail. As a 25 year veteran certified general appraiser (California) we are often involved as an expert witness regarding appraiser fraud, misrepresentation, and standard of care. The fact that your property declined in value (apparently over 60&) since 2005 is not, in and of itself, a glaring error. Indeed, such value declines are found in many markets throughout the United States at this time. The other HUGE problem is that most comparable sales are either short sales or REO properties, and NONE of these types of sales are consistent with the mandatory definition of market value to which the appraiser must comply. Your goal can be achieved, and the results successful, if you elect to have a professional appraiser work with your attorney to discredit the appraisal that cost you your home. Obviously, the appraiser and the bank will deny any wrongdoing unless and until the damages are apparent in litigation......or pending litigation. There is a website being created by and for appraisers in a national attempt to provide this type of service to the general public and to those select few attorneys that are willing to expand their services into this much needed arena. There are a few specialists out there that can help you now, but if you would like such a professional review that would be performed with specific attention as to whether or not you have a legitimate, "win-able" legal action please feel free to contact me at any time. Douglas G. Kues c/o dgkues@gmail.com. If you are unsure of taking the steps yourself you are welcome to have your attorney contact me directly. Good Luck to you.....there is little consolation in knowing there are millions just like you.
1 vote Thank Flag Link Thu Jan 27, 2011
It would be hard to prove that an appraiser is lowering the value of your house in order for a colleague or a relative to buy the land at a lower price to develop and later resell. The proof would take time and the loss of the home. Perhaps you should use the public court system to see if appraisers you hire have relatives that have bought homes they have appraised before at low figures. If there is a pattern of house flipping associates somehow related to appraiser companies, you may be able to close the appraisal company whose owners may change their company name and reopen later. The law suit should be against the owners of the appraisal company (not the company itself) and the suit should also be against the people who bought the house after it was sold since refinancing could not be done adequately. This takes time and money. The lawyer you would hire may end up with a third of whatever you win... of course if that's million dollar homes built on land you were tricked into selling due to a low appraisal not allowing you to refinance, it may be worth it to secure that lawyer. Good luck. My family is going through a similar problem. There ought to be laws against appraisers low-balling the value of homes.
0 votes Thank Flag Link Thu Aug 29, 2013
Confer with an attorney to many unknowns WITHOUT being involved in the transactions ALL paperwork and etc. No professional can render an opinion

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Jan 27, 2011
Here's a solution if you truly want to refinance your mortgage... http://www.KristineBredeau.com with HomeBanc

HomeBanc does not use a middleman company that sends out incompetent appraisers so you will surely get a legitimate appraisal. Unfortunately you can thank your congresspeople for trying to fix the problem with mortgage broker, hand picked appraisers who may have given inflated appraisal values. By requiring an appraisal "management" company to assign appraisers they often go with the cheapest, least experienced appraisers. Because these appraisers are giving up half of their appraisal fee to the mgmt middleman company, they will often give ultra conservative values.

So, try Kristine Breadeau (she's the mortgage lending manager) at HomeBanc and you should be able to get your loan refinanced.

Hope this helps.
Alma
0 votes Thank Flag Link Thu Jan 27, 2011
Thank you all for your super fast responses. Truly appreciated. If only my bank and appraisal company acted with a tenth of your professionalism I would've resolved this dispute long ago.

I've never been treated so badly by a company before...if I started into all the details I'd be writing for about a day straight. But in case anyone wants another example of what I've experienced then please read on.

For three months the bank utterly ignored my plight. I sent them an eight-page letter filled with missed comps, arguments and questions. You know what they sent me back? A photocopy of my original 2005 mortgage, which answered exactly 0% my questions. They knew that, but it was their way of thumbing their nose at me.

But I'm very stubborn so I sent the same letter to my Congressman (Bill Posey). When Congressman Posey asked for a response then suddenly the bank's corporate office called me up with "great news"--new data indicated I was eligible for refinancing after all. My property value suddenly shot up a staggering $35,000 in just 3 months time--a wondrous feat given the fact that the Florida market continued to steadily fall in that same period. How was this possible? The bank had an unnamed appraiser do a new "drive by" appraisal of my home. Over the phone of course--nothing in writing--and based upon that they offered me a new loan.

Can you imagine if I called up the bank and told them that I had an unnamed appraiser drive by my house, and based on that, with nothing in writing, I declared my home value to have increased nearly 20% in just three months when the market actually declined? They'd still be laughing today. Yet somehow a bank can get away with that? Outrageous.

The bank had to walk a thin line here--with a Congressman asking questions they had to reverse course without somehow admitting to anything wrong with the original appraisal. Having nothing in writing from an unnamed agent was their perfect solution since I had no report to read, scrutinize and compare. Worse still, they were still highly underrating the value of my property--remember an empty field with an acre less of land had sold for $177,500 just two months prior to my written appraisal.

Since I owed $185,000 on my original mortgage, I still couldn't qualify for their new offer unless I brought close to $10,000 cash with me for fees and charges. What a terrible scam--if I took their offer they could just write me off and get nearly $10,000 from me as a bonus. Ugh. I declined their offer as they still will not give me a fair appraisal and an honest loan. The unethical behavior of both companies has cost me the chance to refinance my home and I cannot let them get away with it. I'm just so unsure what to do next or who to turn to.

Anyhow, if someone had advice I'd certainly listen. If not, thank you for the opportunity to vent some frustration over this broken, sad system we're all stuck in right now.
0 votes Thank Flag Link Wed Jan 26, 2011
If you suffered any financial damages because of this, absolutely. Also, sue the mortgage company and the AMC that they used.

Also, the state appraisal board would be interested too!
Web Reference: http://fglick.com
0 votes Thank Flag Link Wed Jan 26, 2011
Good for you for sticking up for what you feel is right.......too many people go along with this kind of activity without putting up a fight. It sounds like you have made some progress by getting people to review your case.

Hold your ground......and make it happen.

Good luck,
Bill
0 votes Thank Flag Link Wed Jan 26, 2011
Oh, forgive me if I came across too strong in my original post, but believe me--the last thing I want to do is to start a lawsuit against two gigantic, ultra-wealthy corporations. I've never sued anyone my whole life and wouldn't even know where to start. It's just that I'm frustrated by this whole ordeal. Is there anything else I could do at this point?

I understand that property values have fallen a great deal in my area but that appraisal is just plain wrong. I think I caught them in a catch 22--they didn't want to admit that anything was wrong with the appraisal but the only way to counter the arguments I brought up was to state some things that I can prove are untrue. And if anyone wanted to know more details I definitely have them. All I want from them is honest answers to the questions I posed and fair appraisal! What a nightmare this has been.
0 votes Thank Flag Link Wed Jan 26, 2011
Since you are asking a legal question, it's in your best interest to consult with an attorney who specializes in real estate, he/she can best advise as it relates to your specific situation.
0 votes Thank Flag Link Wed Jan 26, 2011
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