Saying that now-defunct Utah Central CU would “not have made the loan if the appraiser had performed his appraisal with care, skill and diligence,’’ the NCUA sued an appraiser and alleges that the loan led to the credit union’s eventual failure.
The credit union lost $407,000 on a $584,000 loan for the purchase of home appraised by Utah appraiser Blaine Park at $730,000, but the agency alleges it should have been closer to $520,000.
The NCUA alleges, in a lawsuit filed in U.S. District Court in Salt Lake City, that Park didn’t follow the appropriate professional standards and the $160 million credit union wouldn’t have made the loan for as much as it did if it hadn’t been for Park’s erroneous appraisal.
Earlier this year, Chartway FCU of Virginia Beach, Va., acquired Utah Central under a purchase and assumption merger in which the NCUA assumed millions of dollars in losses.
The Salt Lake City credit union had seen the value of its real estate portfolio decline for at least the last three quarters of 2010 and the first quarter of 2011. The credit union lost $547,000 last year, $3.3 million in 2009 and $3 million in 2008.