New York, NYWashington Mutual faces a class action lawsuit alleging the company committed securities fraud by over-inflating home appraisals while also inflating prices. The lawsuit follows a complaint filed by the New York Attorney General's office that names Washington Mutual as pressuring other companies to provide inflated home appraisals.
The lawsuit, which was filed on behalf of investors, states, "WaMu [Washington Mutual] told investors in mid-October 2007 that the company had suffered a 52-percent drop in net income during the third quarter of 2007 and would have to set aside up to $1.3 billion in the fourth quarter of 2007 to cover its losses. These write downs were caused, at least in part, by the impairment of loan assets that were based on the inflated appraisals fraudulently orchestrated by WaMu and eAppraiseIT."
The Attorney General's office announced in early November that it was investigating Washington Mutual for colluding to inflate the appraisal values of homes. According to a release from the Attorney General's office, numerous emails at eAppraiseIT showed that the company's executives knew that such collusion was illegal but broke the law to secure business with Washington Mutual. The investigation focuses on whether or not Washington Mutual put pressure on eAppraiseIT to use a list of "Proven Appraisers" who would provide inflated home appraisals.
In making his announcement, Attorney General Andrew M. Cuomo said, "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 rip off homeowners and investors alike."
From April 2006 to October 2007, eAppraiseIT supplied Washington Mutual with approximately 262,000 appraisals. Reviews of nine appraisals on New York properties found inflated appraisals in every case. The appraisals were inflated from between $5,000 and $720,000.
Appraisal fraud hurts both consumers and investors. Consumers are victimized because they are misled about the value of their homes, which can increase their risk of foreclosure. Investors are affected because appraisal fraud distorts the value and risk of loans sold in financial markets.
According to the Attorney General Cuomo, Washington Mutual profited from higher appraisals because it allowed the company to close more home loans at greater values. He cites a number of emails involving Washington Mutual, eAppraiseIT and First American (parent company to eAppraiseIT) as proof of collusion. Included in this is an email that allegedly shows Washington Mutual pressured eAppraiseIT to inflate its home appraisals as a condition for doing future business together and an email from eAppraiseIT to First American, in response to Washington Mutual's "Proven Appraiser" program stating, "we have agreed to roll over and just do it..."
In response to the Attorney General's announcement, Washington Mutual released a statement that it would defend itself from all "unfounded allegations and lawsuits." The company further stated that it outsources all of its appraisals to two national vendors who use licensed appraisers.
Appraisal fraud is a serious crime that affects hundreds of thousands of consumers and investors. Homeowners are now left with homes that are worth far less than they were led to believe and face an increased risk of foreclosure. Companies who participate in appraisal fraud must be held accountable for their actions.
If your mortgage is with WaMu, and if the appraisal was performed by First American, please contact a lawyer involved in a possible [Washington Mutual Lawsuit] who will review your case at no cost or obligation.
what is going on with this, still waiting to hear something
Posted by admin
The settlement info from the NY AG can be found at this link: http://www.ag.ny.gov/press-release/ag-schneiderman-secures-78-million-settlement-first-american-corporation-and
Posted by Cindy willower
another 'victim' in this fiasco case and still have heard nothing and here it is June 2013!!!
Posted by Paula Porcello
in 2011 I received a card in the mail about a Class Action suit on Washington mutual charging high interest rates on coop
loans/mortgages. It was North American Mortgages/ then went to Washington Mutual Home Loans. Monthly interest rates high....I have never heard what happened to this Class Action Law suit filed against them in New York City. Washington Mutual response? my home loan was in 2004
Posted by martha vAlencia
I havent heard any response on the outcome..
have i been mislead yet again?
Posted by A. Temmeli
I sent in my form before the deadline, and followed up by mailing my change of address as directed by the FAQs on the case. I have been waiting for results, and I see I am not alone. How do I find out if I am to recieve a settlement from the case. This is nerve-wracking!
Posted by Mr. T.L. Dennis
I did return my notice in time to include me in the lawsuit but could not find my Loan number, does this affect me and if so in what way? Also I have not heard anything else about the case but I see a judgement has been ordered. How do I find out if I am in on the settlement?
Posted by admin
Unfortunately, for those of you trying to get an update on what's happened with your individual paperwork, you need to contact the party who sent the letter to you regarding the Washington Mutual class action. However, given that the settlement for this was only announced on September 28, 2012, note that it can take some time for any settlement distributions to occur (yes, even months!). Here is the press release from the D.A.'s office regarding the settlement: http://www.ag.ny.gov/press-release/ag-schneiderman-secures-78-million-settlement-first-american-corporation-and
Posted by Anthony and Olivia Papa,Temecula,Ca
We also filled out the forms upon receiving the letter re fraud by Washington Mutual and a potential class-action lawsuit, however it is now Dec. 1, 2012 and have not heard from anyone on this issue. We still have all the information re this loan during the 2001-2004 timeline.
We would like to know what is happening in this matter and who else do we contact?
Posted by Michael McKenzie
I got the letter and paperwork, filled it all out, including the loan number and I have not received any kind of a response.
Posted by MR MRS LAURRY CHERYL GREENFIELD
I GOT THE LETTER BUT DID NOT HAVE OUR LOAN NUMBER BUT I FILLED THE PAPERS OUT THE BEST OF MY KNOWLEDGE
BUT HAVE NOT HEARD NOTHING YET PLS LET ME KNOW
Posted by Leonard and Yvonne Hardy
We have also sent in paperwork and haven't heard anything since.
Posted by ronald billingsley
I have recieved my letter months ago and sent everything in.I have not heard anything since.
Posted by Gary Steffen I
I misplaced my letter telling me that I am a part of the class action lawsuit. How can I get a new one? I also have me loan number & a letter from them stating that the lien release document was mailed on 6/12/04... not sure if any of this helps but please let me know thanks.
Posted by Mrs Glenn Simonds
I also have misplaced my letter telling me about the class action lawsuit. I have now found my papers from the loan.
Posted by stella felder
I misplaced my letter telling me that I am a part oa a class action lawsuit. How can I get an application?
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