Part of the Dodd-Frank Act, officially the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed in 2010 required the Appraisal Subcomittee (ASC) to create a complaint hotline. The Appraisal Complaint National Hotline will allow lenders, homebuyers, and appraisers themselves to report complaints about alleged non-compliance with USPAP and/or appraisal independence requirements.
The hotline officially launched on March 15, 2013.
This development will potentially increase finger pointing on the part of consumers and place blame on appraisers when a valuation doesn’t go their way. Although the hotline was developed to be an informational resource, it may streamline the passage of complaints and potentially result in an increase in the volume of complaints. When a complaint is received through the hotline, it will be redirected to appropriate state and federal regulation entities which the ASC will oversee. The ASC does not investigate the complaints or retain the referrals for future reference.
As an appraiser, one important factor to note, is that the ASC specifically states on the website complaint page: "Before requesting a referral, you must know if your complaint involves violations of USPAP or appraisal independence ." It's yet to be determined, but those persons who are unfamiliar with USPAP or appraisal independence may be delayed in making a complaint because of this requirement.
For your reference, there are three ways to report a complaint through the hotline:
Call Center: 877-739-0096
Email: the hotline’s website also offers an email form
The hotline will: “Refer complainants to the appropriate legal authority to receive complaints of alleged non-compliance with the Uniform Standards of Professional Appraisal Practice, commonly referred to as USPAP, or appraisal independence standards, including improper influencing or attempted improper influencing of appraisers or the appraisal process.”
The hotline will not: “Initiate complaints, act on your behalf, arbitrate, submit complaints of any kind on behalf of a complainant, assist in appealing the outcome of a complaint investigated by other regulatory agencies, or intervene in the final outcome.”
The chance of being a target of a claim often has less to do with the quality of your work than with your clients' temperament and expectations. If your relationship with a client goes sour, you could be accused of negligence and get sued even if you didn't make any mistakes. This is already happening to appraisers everywhere, but it will become even more prevalent once the hotline is put in place.
An even bigger concern than that of lawsuits is the likelihood that the hotline will result in a much biggerincrease in licensing complaints from unhappy borrowers. Since many E&O carriers are now beginning to decline coverage due to licensing matters, the wave of potentially frivolous complaints made through the hotline will only create more challenges in terms of cost and availability of E&O coverage.
Be sure your clients understand what you do and how you do it -- as well as what you don't do and why you don’t do it. Failing to communicate with clients and manage their expectations will increase your chances of a complaint being filed with the hotline, ultimately having an impact on your appraisal license and E&O risk, regardless of whether you were at fault.