But what's a little different this time is that many of the lawsuits are generated by borrowers rather than lenders, lawyers who represent appraisers say. "They're really coming out of the woodwork," said Peter Catalanotti, an associate at Manning & Marder, Kass, Ellrod, Ramirez in San Francisco. "We're seeing borrowers suing, saying, 'We never would have bought that house if we'd known it wasn't worth that.'" Borrower lawsuits account for about 75 percent of the uptick in lawsuits against appraisers, said Peter Christensen, general counsel for Santa Barbara, Calif.-based LIA Administrators and Insurance Services, an insurance administrator specializing in coverage for real estate appraisers. Still, overall the amount of litigation against appraisers is relatively small potatoes, Christensen added -- annually about 1,200 lawsuits for professional liability before the mortgage crisis, and now around 2,000, representing about $100 million a year in damages nationwide. "It's a very small world," said Christensen, who is also the author of a blog about legal defense of real estate appraisers. Catalanotti said he's handled about 10 lawsuits against appraisers since the outset of the mortgage crisis. As it did the last time the real estate market tanked, the downturn has triggered an uptick in lawsuits against appraisers.
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