CHARGES TO UNIFORM RESIDENTIAL APPRAISAL REPORT MAY HELP ALLOW CLAIMS AGAINST APPRAISERS
Many people in the appraisal industry still believe that only the “intended user” of an appraisal report may sue the appraiser. This is likely wrong for at least two reasons.
First, in Arizona, pursuant to Sage v. Blagg Appraisal Co., a buyer/borrower in a purchase money loan transaction may sue an appraiser hired by the lender even if the buyer/borrower is not listed as an “intended user.”
Second, as of March 2005, Fannie Mae and Freddie Mac adopted a new Uniform Residential Appraisal Report form (generally used in connection with residential loans) that explicitly allows certain third-parties (i.e. parties other than the lender) to receive and rely on the report. Specifically, item 21 of the Appraiser’s Certification provides, in part, that:
The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser’s or supervisory appraiser’s (if applicable) consent.
In addition and more importantly, item 23 of the Appraiser’s Certification provides as follows:
The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties.