Consumer Law

Washington Mutual (WaMu) and First American Corporation Appraisal Fraud

There is currently an investigation against Washington Mutual (WaMu) and First American Corporation in connection with home mortgages made by WaMu. The investigation concerns allegations that First American allowed WaMu to control appraisal values and apply pressure to appraisers to get housing value estimates raised in order to help close loans. Certain reports also allege that WaMu 'cherry picked,' which First American appraisers would appraise WaMu financial properties, based on which appraisers WaMu viewed would provide values high enough to permit WaMu's loans to close. First American Corporation provides real estate appraisal services to savings and loans, banks and other lending professionals through First American eAppraiseIT, an appraisal management company. WaMu is First American's largest client. On November 1, 2007, the Attorney General of New York filed a complaint making similar allegations. If these allegations are correct, then homeowners would have obtained artificially inflated mortgages from WaMu and may have overpaid for their homes. WaMu Appraisal Articles: Washington Mutual Appraisals Investigated by the SEC The Securities and Exchange Commission (SEC) is now investigating allegations about Washington Mutual's practice of inflating home appraisals. The SEC's investigation will look at whether WaMu accurately told investors how its loans were appraised and whether the company's loans were properly disclosed to investors. Washington Mutual Faces Class Action Lawsuit Washington Mutual faces a class action lawsuit alleging the company committed securities fraud by over-inflating home appraisals while also inflating prices. The lawsuit follows a complaint filed by the New York Attorney General's office that names Washington Mutual as pressuring other companies to provide inflated home appraisals. WaMu: Shares Drop, Pressure Mounts Over Alleged Wrongdoing It has been a week of tumult and turmoil for Washington Mutual and First American, since New York State Attorney General Andrew Cuomo initiated a lawsuit against First American and its real estate appraisal arm, eAppraiseIT alleging an illegal practice of inflating the values of homes to qualify for loans. WaMu Inflated Valuations Hurt Consumers Homeowners Angry at Washington Mutual's Appraisal Tactics

From posted 2008-03-10.