While the huge
settlement with five big lenders for wrongdoing in processing foreclosures is
good news for consumers, it’s encouraging to see action taken against a company
involved in the housing meltdown.
eAppraiseIT, formerly
one of the nation's largest real estate appraisal management companies and its
parent corporation First American Corp., agreed to a $7.8 million settlement
today for colluding with Washington Mutual to inflate the values of homes.
“Coercion of
appraisers to inflate home values and the erosion of appraisal independence
directly contributed to the housing crisis,” New York Attorney General Eric T.
Schneiderman said in a statement. “By
giving in to lender pressure, these corporations violated a principle that is
vital to restoring and maintaining a healthy housing market."
From early 2006
through late 2007, eAppraiseIT conducted about 10,000 appraisals for WaMu in
New York state. Thousands of the appraisals were conducted by appraisers who were
hand-selected by WaMu staff for a "proven appraiser list" with the
expectation these appraisers would inflate property valuations, allowing more
home loans to close at higher values, Schneiderman said.
eAppraiseIT also
permitted WaMu loan officers to submit multiple reconsiderations of value,
known in the industry as "ROVs," often without any evidence of error
or proof that would support WaMu's efforts to increase the property values
above the initial appraisal, he said.
I hope many more
actions are filed against those responsible for the housing collapse. They need
to be held accountable for the problems and suffering they have caused
consumers.
