AI Facing Lawsuit Over Allegations of Improper Certification Practices
A recent lawsuit has brought to light concerning issues regarding the certification practices of the Appraisal Institute (AI). The lawsuit alleges that different states have varying minimum passing grades and requirements for appraisal students, but these standards were not consistently applied. Shockingly, this alleged practice may have been ongoing since 2008.
The lawsuit was initiated by an employee named Akins who, upon joining AI in February 2024, noticed discrepancies in the certification process. When she raised her concerns to the trade group, she was met with a dismissive response, citing a “don’t ask, don’t tell policy.” This prompted Akins to escalate the matter to AI CEO John Udelhofen in October, requesting the withdrawal of certifications that could not be verified as accurate.
However, instead of addressing the issue, Akins faced retaliatory actions from AI’s leadership. A work trip she had scheduled was abruptly canceled by AI vice president Craig Steinley, and Udelhofen mentioned a potential “employment separation package” for her in text messages. Akins took a stand by reporting the incorrect exam scores and Udelhofen’s behavior to human resources, which ultimately led to her dismissal in December, just 10 months after her hiring.
The lawsuit, filed in the U.S. District Court for the Northern District of Illinois Eastern Division, accuses AI of violating whistleblower laws and retaliatory discharge. Despite repeated requests for comment, AI declined to provide a statement to HousingWire regarding the lawsuit.
This legal battle is the latest development in the tumultuous saga surrounding AI and its leadership. The abrupt firing of CEO Cindy Chance in September sparked discontent among AI members, who have long criticized the group for its inadequate advocacy for residential appraisers.
Appraisers believe that Chance was ousted for her attempts to bring about much-needed change within the organization. Udelhofen was appointed as interim CEO following her departure.
Amidst these controversies, AI has also faced scrutiny for its lack of diversity and alleged cozy relationship with appraisal management companies (AMCs). Appraisers have raised concerns about AMCs taking a significant portion of appraisal fees, leading to a decline in the number of appraisers in the field.
The legal landscape further intensifies as law firms like Hilgers Graben and Morgan & Morgan delve into lawsuits against AMCs in California over deceptive practices and unjust enrichment. As the industry grapples with these challenges, the demand for transparency and accountability within AI and related entities continues to grow.