First American Sued for Falsely Inflating House Values
According to the article published by “The Truth About Mortgage,” First American Corp. and its eAppraiseIt mortgage appraisal unit are being sued for inflating mortgage appraisals to enable more loans by Washington Mutual. This is certainly an interesting twist for the primary and second mortgage lender. Here is an excerpt from the article:
Apparently Washington Mutual had complained that appraised values were coming in too low, effectively killing loans in the process, forcing the bank to handpick appraisers to bump values higher, even if they weren’t accurate.
Per the lawsuit, eAppraiseIt allowed Washington Mutual’s loan production staff to handpick “appraisers who would bring in appraisal values high enough to permit WaMu’s loans to close.”
“The independence of the appraiser is essential to maintaining the integrity of the mortgage industry,” Cuomo said. “First American and eAppraiseIt violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike.”
Cuomo said e-mails documented the fact that eAppraiseIt executives understood their actions were wrong, but continued to break the law to secure future business with the mortgage lender and banking giant.
So how does this affect those looking to buy a home? Just keep in mind that it might be a good idea to get a second opinion from an appraisal company completely unaffiliated with the mortgage lender. While the lender might not acknowledge the second appraisal, at least you will know whether or not they’re being honest with you.
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