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Toll hitting hard on appraisers

Official seeks fines, licence revocations for over-valuations

John Rebchook, Rocky Mountain News

Published October 14, 2006 at midnight

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Erin Toll, Colorado's top real estate cop, on Friday presented details of her ongoing investigation of "the most egregious cases" of appraisers she thinks knowingly overvalued homes by as much as hundreds of thousands of dollars, sometimes leading to foreclosure.

Toll, the new director of the Denver Real Estate Commission, recommended record fines as well as the revocation of licenses of several appraisers for their work in the Denver and Pueblo areas.

None of the appraisers was identified, although Toll said if the Board of Real Estate Appraisers accepts her recommendations, her investigative work will be turned over to the attorney general's office. The attorney general could then bring criminal charges against the appraisers.

"It's not my modus operandi to sit on my hands and wait for other law enforcement agencies to take action," she said at one point during the appraiser board meeting on Friday morning.

In total, Toll is seeking $61,000 in penalties against four appraisers and is seeking to revoke the licenses of three of them.

She is pushing a $36,000 penalty against one person, who allegedly over-appraised a dozen homes in the Pueblo area by 8 percent to 46 percent. Three of those went into foreclosure.

Before Toll took over, fines seldom exceeded $2,000 or $3,000, occasionally hitting $4,000, according to people familiar with the process. A state statute allows $500 per violation, which would translate to 72 violations for the one appraiser against whom Toll is seeking the biggest fine. One transaction can result in multiple violations.

In another case, an appraiser allegedly overvalued a property by $255,000.

Toll is seeking a $14,000 fine against that appraiser.

Toll is pursuing a $10,500 fine against an appraiser who allegedly overvalued seven properties in Pueblo, some by as much as 100 percent. All seven ended up in foreclosure.

"I asked the investigators to find the worst cases," Toll said. "This goes along with our triage."

She compared lesser cases to "traffic tickets" and hopes they can be handled at the staff level.

Attorney Cameron T. Chandler, who is representing one of the unidentified appraisers, said he is concerned that Toll is being "overzealous" and is coming down too hard on these appraisers to send a message to the industry.

"Unfortunately, some of the assessors (discussed) at the meeting today have been caught in her cross hairs," said Chandler, an attorney with Bennington, Johnson, Biermann & Craigmile.

"I just hope the board will make their decisions fairly and objectively, and will not be unduly influenced by Ms. Toll," Chandler said after the meeting.

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