Washington Mutual Hit by Suit
An article published by Bloomberg goes into the details of the suit against Washington Mutual and allegedly dishonest appraisals. An inflated appraisal can often make it impossible for a buyer to pay off mortgage loans, and is one of the reasons for the mass number of foreclosures plaguing our nation. According to the article:
Washington Mutual Inc., the largest U.S. savings and loan, fell the most in 20 years after New York Attorney General Andrew Cuomo said he found a “pattern of collusion” on mortgage appraisals linked to the company.
Appraisals that don’t accurately reflect a home’s price could allow unscrupulous loan officers or brokers to close a deal that would otherwise be scotched, said Terry Wakefield, a mortgage industry consultant.
Washington Mutual has lost more than $25 billion in market value this year, including about $3.7 billion today, as the stock plummeted 56 percent.Mortgage brokers are typically paid when they close a loan, and the “temptation to cheat is overwhelming” when home prices fall, Wakefield said.
“The fact that Washington Mutual and every other lender allow this conflict to take place within their organization is something they need to take responsibility for,” he said. “If this turns up an indication of rampant inflated valuations, it’s going to be a problem.”
The more we dig into the financial crisis, the more we find instances of corruption. It seems impossible to know who to trust these days. But let’s face it, there were always be corrupt officials trying to cheat everyone else of their money. The best that anyone can do is to get multiple appraisals and quotes to make sure that they are being dealt with fairly.
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