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Does a Mortgage Lender Have Liability to The Borrower for a Negligent Appraisal? 

neglegent appraisal

When you get a mortgage, the property being purchased is appraised in order to determine its value. If the appraisal comes back with inaccurate information, this can have serious consequences for the borrower.

In some cases, the lender may be held liable for damages caused by a negligent appraisal. grounds for suing an appraiser are fairly limited, but if you feel that your appraisal was wrong and it caused damage to your finances, you should speak with an attorney to see if you have a case.

Appraisals can be wrong for a number of reasons, but if it can be shown that the appraiser was negligent in their duties, this may be grounds for a lawsuit. Appraisers have a duty to exercise reasonable care when appraising a property, and if they fail to do so, they may be held liable.

Some common grounds for suing an appraiser include:

  • Appraisal has wrong information: If the appraiser provides inaccurate information about the property that leads to the borrower paying more than the property is worth, they may be held liable.
  • Appraiser negligence: If the appraiser fails to properly inspect the property or otherwise does not exercise reasonable care in their appraisal, they may be held liable.
  • Fraud: If the appraiser purposefully provides inaccurate information in order to help the lender, they may be held liable for fraud. If you believe that your appraiser committed fraud, you should speak with an attorney immediately. If you have been harmed by a negligent appraisal, you may be able to recover damages from the appraiser. These damages may include the difference between the appraised value of the property and its actual value, as well as any other damages that you incurred as a result of the appraiser’s negligence.

Can a home appraisal be challenged?

Yes, a home appraisal can be challenged if you believe that the appraiser made a mistake or was negligent in their duties.

How do you fight an unfair appraisal?

If you believe that your appraisal was unfair, you can challenge it by contacting the appraiser and asking for a reconsideration. If the appraiser refuses to reconsider their appraisal, you can contact the lender and ask for a review.

You can also sue the appraiser if you believe that they were negligent in their duties or committed fraud.

What is appraisal discrimination?

Appraisal discrimination is when an appraiser provides a lower appraisal value for a property because of race, color, religion, national origin, sex, disability, or familial status.

Appraisal discrimination is illegal and grounds for suing an appraiser.

Discrimination in valuing a property isn’t new to the industry. In the early 1900s, appraisers would commonly use different methodologies to appraise properties in white and black neighborhoods. This is no longer the case, but appraisal discrimination can still happen.

How do I file a complaint against an appraiser?

If you want to file a complaint against an appraiser, you can contact your state’s licensing board.

For us in Texas, you would visit TREC.com.

Conclusion

When getting a mortgage, it’s important to be aware of the potential consequences of a negligent appraisal. If you believe that your appraiser was negligent in their duties, you may be able to sue them and recover damages.

If you have any further questions, please don’t hesitate to reach out to us. We’re here to help in whatever way we can.

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