New York and state attorney Andrew Cuomo is suing First American Corporation, the nation’s largest provider of business information and largest title company, for caving into demands from Washington Mutual to raise appraisal prices so that they could close loans at a desired price.
State Attorney Cuomo stated that “The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion”.
The suit alleges that First American’s appraisal arm, eAppraiseIt, changed their appraisals to appease Washington Mutual. It also alleges that the president of eAppraiseIt, Anthony Merlo, wrote numerous emails to First American basically stating “We have agreed to roll over and just do it”.
Most real estate insiders will agree that the practice of manipulating appraisals have been going on for years not just at Washington Mutual but for the mortgage industry as a whole. If the state of New York wins this case, then it could open up the flood gates for more suits of similar nature coming down on financial institutions. The current sub prime crisis is bad enough and the rise of such suits will make the situation much worse. Uugh!