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E-Mail Excerpts in eAppraiseIT Case
November 1, 2007 4:23 p.m.
The following are excerpts of e-mail messages from eAppraiseIT executives and from appraisers. They are included in New York Attorney General Andrew M. Cuomo's 31-page lawsuit against First American alleging that its eAppraiseIT unit allowed Washington Mutual to "hand-pick" appraisers. (Read the full complaint.)

On March 1, 2007, eAppraiseIT's president told WaMu executives in an email:

"Recently, we have been notified that Lending would like us to use more of their 'Proven Appraisers' versus appraisers off our preselected appraiser panel. It seems the amount of Reconsideration of Value (ROV) requests associated with our appraisers far exceeds those initiated when a WaMu proven appraiser completes a file. Said differently, Wamu proven appraisers bring the value in a greater majority of the time with minimal involvement of the vendor, sales and Appraisal Oversight. I am fine with that, of course, and will happily assign Wamu orders to Wamu proven appraisers instead of eAppraiseIT's approved panel appraiser whenever possible."

On April 4, 2007, eAppraiseIT's executive vice president wrote an email to senior eAppraiseIT executives regarding eAppraiseIT's legal liability for using WaMu's Proven List. He explained that appraiser independence is initially:

"… the lender's responsibility since the OCC [Office of the Comptroller of the Currency]/OTS only pertain to lenders. However, we as an AMC need to retain our independence from the lender or it will look like collusion. Imagine a simple mortgage broker saying he will give us the work if we use his 'proven' appraiser. We say no. This is very similar to that except they are very big. … So the push back to WAMU needs to be (assuming we want to do this some day), eAppraiseIT needs to choose the appraisers, not WAMU. Where it gets really clear that eAppraiseIT is NOT choosing is the proven idea because they always go first and MUST be selected unless there is a specific reason why not. eAppraiseIT is clearly being directed who to select. The reasoning that there are fewer ROVs is bogus for many reasons including the most obvious – the proven appraisers bring in the values. Fun, eh??"

On April 17, 2007, eAppraiseIT's president wrote to senior executives at First American, describing the issues with WaMu as follows:

"In short, the issues are using their designated appraisers as mandated by the WaMu production force at 20% gross margin and bypassing our panel. We view this as a violation of the OCC, OTS, FDIC and USPAP influencing regulation."

On April 17, 2007, eAppraiseIT's executive vice president wrote to eAppraiseIT's president and chief operating officer regarding eAppraiseIT's legal liability:

"OTS and OCC only control lenders. However, there is the legal concern about collusion. For example, let's say it is discovered that a lender (loan officer at a lender) is being collusive with an appraiser that is on OUR (WAMU) panel. That is, our reps and warrants apply. Then we are liable I would say because we have gone along with it. ... In addition, I think it will tarnish our reputation in the appraisal community because we are allowing WAMU to pick appraisers based on their loan officers. It makes us look complicit. So [it] may not be actionable legally but would hurt our reputation. So those are two bad things off the cuff. There may be more if we think about it and use creative paranoia."

On April 3, 2007, an appraiser wrote to eAppraiseIT the following:

I WAS JUST MADE AWARE FROM ONE OF YOUR COMPETITORS (LSI) THAT I MAY BE ON A BLOCKED LIST FROM WAMU. THIS MAY HAVE SOMETHING TO DO WITH THIS APPRAISAL IN QUESTION FOR WHICH I THOUGHT WAS BEING TAKEN CARE OF AND IN PROCESS OF BEING RESOLVED. CAN SOMEONE HELP ME OUT HERE AS THIS IS IMPORTANT TO US TO KEEP THE RELATIONSHIP WITH WAMU THROUGH EAPPRAISEIT. WHAT IS GOING ON AND WHAT CAN I DO TO CLEAR THIS FILE UP?????

On April 17, 2007, another appraiser wrote to eAppraiseIT that:

"This is the second Wamu Appraisal quality assurance issue I have received from Wamu in the past 2 months. Both as a result of an appraisal I completed that did not come in to their predetermined value for a 'valued' Wamu client. I was pressured for 2 weeks to change both my value and the conditions of my appraisal report … both of which were violations of USPAP, FANNIE MAE and the Supplemental Standards I am required to observe and am bound by my license to complete. Since that time, I have been singled out by WaMu and have been pressured on every appraisal I have completed that did not reach a pre-determined value. I feel that Wamu is in process of 'blacklisting' me as an approved Wamu appraiser by going after each appraisal I complete and looking for violations."

Source: New York Attorney General's office
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