Appraisal Institute sued over wrongful termination allegations
According to the lawsuit, different states have different minimum passing grades and requirements, but these were not accurately applied to appraisal students. The alleged practice could date back as far as 2008.
Akins, who was hired in February 2024, said she brought the issue to the trade group’s attention but was told there was a “don’t ask don’t tell type of policy,” according to legal filings. In October, she reported the issue to AI CEO John Udelhofen and asked him to withdraw certifications she couldn’t validate as accurate.
Days later, AI vice president Craig Steinley canceled a work trip Akins had scheduled, and she believes it was “punitive.” Over text, Udelhofen informed Akins that he was working on an “employment separation package” for her, claiming he was “trying to help you get out with some runway.” He added that Steinley “will make it hell for you as long as you stay.”
Akins responded by reporting the incorrect exam scores and Udelhofen’s text messages to human resources. After that, Udelhofen began to reassign her responsibilities, and she was fired in December, just 10 months after she was hired.
The case was filed in the U.S. District Court for the Northern District of Illinois Eastern Division. It charges AI with violating state’s whistleblower laws and with retaliatory discharge.
The institute declined HousingWire‘s request to comment on the lawsuit.
The lawsuit is the latest chapter in the drama surrounding AI and its leadership. In September, CEO Cindy Chance was abruptly fired after just a year on the job, which caused a backlash among AI’s members who’ve long viewed the group as an inadequate advocate for issues that face residential appraisers.
The perception among appraisers is that Chance was fired for attempting to enact the change they wanted to see within the trade group. Udelhofen was named interim CEO after her firing.
“She was terminated because her positive changes threatened the entrenched interests of the Institute’s Board members,” Lori Noble, a West Virginia appraiser who has been openly critical of the organization’s board, said at the time of the firing.
“They have a lot to answer for now, and it is up to the members to demand a full audit of the organization, or some type of legal action, to explain the behavior and conduct recently, as well as the last several years.”
AI was criticized by the Biden administration for a lack of diversity within its ranks, and the institute’s internal statistics show that the profession is overwhelmingly white and male.
Appraisers have also criticized AI for what they perceive as a cozy relationship with appraisal management companies (AMCs), which serve as middle men between appraisers and lenders.
Appraisers say that AMCs taking more of the appraisal fee than is warranted by the amount of work they do, while also misleading the public on how much of the fee goes to appraisers. This has led to a huge decline in the number of appraisers, they say.
The law firm Hilgers Graben recently filed a class-action lawsuit against three AMCs in California over allegations of misleading homebuyers and unjust enrichment. Personal injury firm Morgan & Morgan also said it is looking into the matter.
