|
CONSUMER NEWS RECALLS COMPLAINT FORM SCAM ALERTS |
| Small Claims Guide | Class Actions | Lemon Law | FAQ | Resources | Newsletters | Spanish | |
|
|
![]() |
New York Sues WaMu and its AppraisersCompanies conspired to inflate appraisals, suit charges |
|||||
|
November 1, 2007
In a scheme detailed in numerous e-mails, eAppraiseIT (“EA”), a subsidiary of First American Corporation, caved to pressure from Washington Mutual (“WaMu”) to use a list of preferred “Proven Appraisers” who provided inflated appraisals on homes. The e-mails also show that executives at EA knew their behavior was illegal, but intentionally broke the law to secure future business with WaMu, Cuomo's suit charges. “The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike,” said Attorney General Cuomo. “The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market," Cuomo said. "By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion.” As First American acknowledged in its 2006 annual report, appraisal fraud can damage the entire housing market, including consumers and investors alike. Consumers are harmed because they are misled as to the value of their homes, increasing the risk of foreclosure and hindering their ability to make sound economic decisions. Investors are hurt by such fraud because it skews the value and risk of loans that are sold in financial markets. Pressure appliedIn April 2006, EA began providing appraisal services for WaMu, which became EA’s biggest client. Within weeks, WaMu began complaining to EA that its appraisals were not high enough. WaMu pressured EA to employ exclusively a new panel of appraisers that WaMu hand-selected as “Proven Appraisers.” This set of appraisers was chosen by WaMu specifically because they inflated property appraisals, the suit alleges. WaMu profited from these higher appraisals because they could close more home loans, at greater values. Over the course of their relationship, between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu. Attorney General Cuomo’s investigation uncovered a series of e-mails between executives at EA, First American, and WaMu that he said show EA officials were willingly violating state and federal appraisal independence regulations to comply with WaMu’s demands:
Attorney General Cuomo’s lawsuit seeks to end the illegal relationship between First American and EA and WaMu. It also seeks penalties and disgorgement from First American and EA. The lawsuit alleges that First American and EA violated appraiser independence laws, which regulate the conduct of real estate appraisers. The lawsuit was filed in the Supreme Court of New York, New York County. Report Your Experience
|
|||||
Back to the top | |
||||||
Advertisement
|
Home |
Complaint Form |
News |
Recalls |
FAQ |
|
Terms of Use Your use of this site constitutes acceptance of the Terms of Use
Copyright © 2003-2008 ConsumerAffairs.com Inc. All Rights Reserved. The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission. |
|