NY Attorney General Sues First American For Alleged Appraisal Inflations

Posted by Orb Staff on November 02, 2007 No Comments
Categories : Residential Mortgage

New York Attorney General Andrew M. Cuomo has sued eAppraiseIT (EA), a subsidiary of The First American Corporation, for collusion with Washington Mutual (WaMu) to use a list of "proven appraisers" who allegedly provided inflated appraisals on homes.

According to the attorney general's office, in April 2006, EA began providing appraisal services for WaMu, which became EA's biggest client. WaMu then pressured EA to employ exclusively a new panel of appraisers chosen by WaMu specifically because they inflated property appraisals.

The attorney general's office further states that WaMu profited from these higher appraisals because they could close more home loans, at greater values. Over the course of their relationship, between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu.

The lawsuit seeks to end the illegal relationship between First American and EA and WaMu. It also seeks penalties and disgorgement from First American and EA. The suit, which was filed in the Supreme Court of New York, New York County, alleges that First American and EA violated appraiser independence laws, which regulate the conduct of real estate appraisers.

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