""New York Attorney General Eric T. Schneiderman"":http://www.ag.ny.gov/ announced a $7.8 million settlement Friday with eAppraiseIT and its parent corporation, CoreLogic, formerly known as First American Corporation.[IMAGE]
The settlement is in regards to allegations that eAppraiseIT, a former appraisal management company and First American subsidiary, violated appraiser independence laws by conspiring with Washington Mutual (WaMu) to inflate home values.
""Coercion of appraisers to inflate home values and the erosion of appraisal independence directly contributed to the housing crisis. By giving in to lender pressure, these corporations violated a principle that is vital to restoring and maintaining a healthy housing market,"" said AG Schneiderman.[COLUMN_BREAK]
According to a statement form the AGÃ¢â‚¬â„¢s office, eAppraiseIT performed over 260,000 appraisals nationally for WaMu, and from early 2006 through late 2007, the AMC conducted some 10,000 appraisals for the lender in New York.
The AGÃ¢â‚¬â„¢s complaint alleges WaMu pressured eAppraiseIT to allow WaMu's loan officers to select their own property appraisers for WaMu loans, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP) and federal and state law.
This practice led to inflated property valuations, and allowed homes to close at higher values.
During a trial in June before Justice Charles Ramos of the New York Supreme Court, witnesses presented by AG Schneiderman included appraisers who testified that they stopped getting WaMu eAppraiseIT assignments because they didn't provide the higher values WaMu loan officers expected.
One email from a former WaMu sales office employee presented at trial said, ""The appraisal list that eAppraiseIT ... is using has been totally scrubbed. But instead of keeping good appraisers, they went for the BADddd ones.""
The settlement requires defendants to pay $4 million in civil penalties and $3.8 million in costs, fees and disbursements incurred from the litigation.