Cuomo: Appraisers Pressured To Inflate Subprime Mortgage Values

[Purveyor]

Source: San Francisco Chronicle

New York Attorney General Andrew Cuomo on Thursday sued a leading real estate appraiser and its parent company for allegedly colluding with the nation's largest S&L to inflate the appraised value of homes.

Cuomo said such pumped-up appraisals were an industry-wide practice and are one reason for the current crisis in real estate lending. Lenders, mortgage brokers, real estate agents and others frequently pressured appraisers to "come in with the right number, the number that justifies the transaction" so that everyone in the chain would receive their commissions, he said.

"The appraisal process is a systemic weakness, in our opinion, in the housing industry," Cuomo said. "The appraisal is the linchpin in the home-buying transaction."

The lawsuit said that eAppraiseIT, a subsidiary of Fortune 500 company First American Corp., caved in to pressure from Washington Mutual to rely on a list of "proven appraisers" who were willing to pump up home prices. Cuomo said the e-mails showed that eAppraiseIT intentionally broke the law to win future business with WaMu.

The e-mails were from "senior sources" in the companies, Cuomo said.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/01/BUO8T4NNM.DTL

[WCGreen]

1. HOnestly, if you can't trust subprime appraisers....

Just who can you trust...

[Purveyor]

4. Well of course, our new majority gov't in DC...of course! eom

[aquart]

2. Washington Mutual. Why am I not surprised?

With no evidence except that they have opened mini-banks on prime real estate all over Manhattan, I have been waiting for a scandal to break about them. The proliferation of those banklets has been like a rash on this island. Why should banks prosper when retailers couldn't in the same space? Every retail-zoned block has a Starbucks and three different banks. WHY so many banks?

[rucky]

3. Because Starbucks can't keep all your money?

:shrug:

[Javaman]

5. There has been a rash of bank building here in Austin as well.

we are sadly going through a very bizarre building boom of condo's. Yeah, I know.

Anyway, on one intersection in downtown along, 3 banks went up with in months of one another.