NCUA Going After Appraisers for Mortgage Losses

In one of the first actions of its kind, the National Credit Union Administration late last week filed a civil claim against a local real estate appraiser in Salt Lake City, saying he provided a faulty appraisal for a loan that caused roughly $400,000 in losses at the defunct Utah Central Credit Union.

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The suit, filed in federal court here, claims that appraiser Blaine Park breached his professional duty by “failing to provide a service at an appropriate level of performance and by failing to abide by the professional standards he purported to follow.”

Park and his attorneys could not be reached for comment. NCUA took control of Utah Central two years ago.

According to NCUA, the then-troubled credit union would not have made the 2007 loan for $584,000 if the licensed appraiser had not provided a $730,000 appraisal. The eventual default on the loan cost the credit union a loss of $407,000. 

The appraisal, which NCUA claims should have been closer to $520,000, violated the Uniform Standards of Professional Appraisal Practice. “The credit union,” claims the suit, “would not have made the loan if the appraiser had performed his appraisal with care, skill and diligence.”

Utah Central, a one-time $190 million credit union, was one of a handful of large Utah credit unions to fail in 2009 and 2010 and was eventually acquired by Virginia’s Chartway Federal Credit Union in a federally assisted transaction.

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Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_401/ncua-going-after-appraisers-mortgage-losses-1025963-1.html?CMP=OTC-RSS

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