New York State Sues eAppraiselT

[hausdok]

According to an article in this month's Builder Online, The New York State Attorney General's Office has filed suit against eAppraiselT, a large appraisal management firm, for colluding with Washington Mutual to inflate the appraisal value of homes.

According to a statement released by the AG, Andrew M. Cuomo, "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 ripoff homeowners and investors alike. The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion."

To read more click here.

[kurt]

I'm liking this in several regards. Some asses are going to get singed.

[ozofprev]

Washington Mutual says:

We have absolutely no incentive to have appraisers inflate home values. In fact, inflated appraisals are contrary to our interests.

But the brokers work on commission.

Low appraisal --> no closing --> no commission.

No incentive???

Page 5 of the complaint succinctly describes the basis of the problems. A link to that complaint is given in the article.

Good stuff - Thanks, Mike!