Arizona BankerJanuary/Feburary 2013The Tricky Relationship Between Banks, Borrowers and AppraisersBy Zachary L. LaPrade Ryley Carlock & ApplewhiteAppraisals are tricky in litigation. Over the last couple of years, a borrower in litigation with a bank typically makes two different arguments related to the bank's appraisal. A borrower often asserts that "the bank's appraiser overvalued the collateral at origination of the loan," or that "the bank's appraiser undervalued the collateral when it sold at a foreclosure." From the bank's perspective, the most frustrating part about these arguments is the bank is not providing an opinion of value. The appraiser is an independent third-party providing an opinion of value. There are strict federal regulations, including the Financial Institutions Reform, Recovery, and Enforcement Act, that separate the bank from the appraiser. Usually, the borrower's argument about the appraisal is a delay tactic. Read full article here.