25 loans defaulted. Now a federal lawsuit alleges the appraisals were way off
A mortgage investor claims Cushman & Wakefield delivered greatly inflated appraisals on 25 loans, and the fallout is now playing out in federal court.
StanCorp Mortgage Investors, LLC filed suit on January 23, 2026, in the United States District Court for the District of Maryland, accusing the self-described global real estate services leader and one of its appraisers, David Masters, of providing valuations so far off the mark that they masked the true risk of lending on multi-family properties and at least one commercial building across Maryland and Virginia.
The allegations paint a troubling picture for anyone in the mortgage business who relies on third-party appraisals to make lending decisions.
According to court filings, StanCorp engaged Cushman & Wakefield entities to appraise properties between 2018 and 2024. The loans, made to entities controlled by borrowers Brandon Chasen and Paul Davis, performed without issue for nearly six years. Then, in mid-2024, the borrowers started defaulting. StanCorp brought in other appraisal firms to take a fresh look at the collateral, and what they allegedly found set off alarm bells.
The investor claims the original appraisals accepted borrower-provided rent rolls at face value, without independent verification. Minor cosmetic repairs were allegedly passed off as gut renovations. Comparable property data reportedly came from other buildings managed by the same borrowers, or from properties in significantly better condition.
One Baltimore property at 817 St. Paul Street stands out in the court filings. The appraisal reportedly listed a mix of one, two, and three-bedroom units when 61 of them were actually studio apartments. Rents were pegged between $1,975 and $3,400 per unit, well above the Baltimore region's average asking rent of $1,502. The appraisal also allegedly described gut renovations costing $14,580,000, or $144,356 per unit, a figure StanCorp says photographs and a basic visual inspection would have contradicted.
At the heart of the lawsuit are alleged violations of the Uniform Standards of Professional Appraisal Practice, the industry benchmark incorporated into law across Maryland, Virginia, Oregon, Illinois, and New York. StanCorp argues that the appraisers failed to meet USPAP requirements on property inspections, data verification, and the use of extraordinary assumptions.
The investor is pursuing claims for negligence, gross negligence, professional negligence, vicarious liability, negligent misrepresentation, and breach of contract. StanCorp contends that the appraisal agreements required USPAP compliance, and that falling short of those standards voided the contracts entirely.
Cushman & Wakefield promotes its Valuation & Advisory practice as providing clients with accurate, reliable valuations based on constantly updated market data. This lawsuit puts that promise squarely to the test.
No final determination has been made in this case. However, the allegations raise pointed questions for mortgage professionals about the limits of appraisal reliance, especially on income-producing properties where valuations hinge on borrower-supplied numbers.
StanCorp is seeking monetary damages, attorneys' fees, and prejudgment interest. The case bears watching for anyone whose lending decisions depend on the accuracy of a third-party appraisal report.
