According to a New York Times report, the NY Attorney General filed a lawsuit in Manhattan accusing an appraisal firm of inflating the values of homes. According to the report, the firm – a subsidiary of the First American Corporation – inflated the values of homes because of pressure from Washington Mutual, a claim the bank denies.
Mr. Cuomo’s case is built on e-mail messages obtained through a subpoena to First American. According to the complaint, the messages show that executives at eAppraiseIT initially resisted the pressure from Washington Mutual to raise the values of the appraisals it was conducting for the lender in early 2006. The loans in question were largely used to refinance mortgages and take equity out of homes. Higher appraisals would allow a lender to make bigger loans and earn greater returns when selling them to investors.
In a written statement, Washington Mutual denies any impropriety.
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Tags: Consumer Protection, credit, debt, housing, In the News, mortgage
