Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Cuomo Charges Crush WaMu

By Laurie Kulikowski
TheStreet.com Staff Reporter

11/1/2007 5:03 PM EDT
Click here for more stories by Laurie Kulikowski

Updated from 3:45 p.m.

Washington Mutual (WM - Cramer's Take - Stockpickr - Rating) plunged 7% after New York's attorney general accused the lender of engaging in a scheme to inflate house appraisals.

Attorney General Andrew Cuomo sued First American's (FAF - Cramer's Take - Stockpickr - Rating) real estate appraisal subsidiary, eAppraiseIT. First American is a big title insurer.

A suit filed in New York State Supreme Court by Cuomo's office says First American "caved to pressure" from Seattle-based WaMu to use a list of appraisers who inflated the values of thousands of homes. Cuomo also alleges that executives at eAppraiseIT "knew their behavior was illegal, but intentionally broke the law to secure future business with WaMu," his office said in a release.

WaMu said it would investigate and suspended its business with the First American unit.

"We have absolutely no incentive to have appraisers inflate home values," WaMu said. "In fact, inflated appraisals are contrary to our interests. We use third-party appraisal companies to make sure that appraisals are objective and accurate."

"The complaint filed today by the New York Attorney General against First American and our eAppraiseIT subsidiary has no foundation in fact or law," First American said in a statement. "The Attorney General's allegations, largely based on a handful of e-mails that have been taken out of context, or mischaracterized, and an incomplete review of the facts, belie our record of compliance with applicable law.

"The program called into question today by the Attorney General has been vetted and approved by the federal regulator responsible for oversight of such programs," First American continued. "We welcome the opportunity to now present all the facts before an impartial third party."

Shares of WaMu tumbled $2 to $25.88.

From April 2006 through October 2007, eAppraiseIT provided approximately 262,000 appraisals for Wamu, Cuomo's office said.

The news comes as housing-related stocks suffer another massive selloff as investors worry about financial firms' potential losses from rising mortgage defaults.

On Thursday, big lender Countrywide Financial (CFC - Cramer's Take - Stockpickr - Rating) fell 7%, and mortgage insurers PMI Group (PMI - Cramer's Take - Stockpickr - Rating), MGIC Investment (MTG - Cramer's Take - Stockpickr - Rating) and Radian Group (RDN - Cramer's Take - Stockpickr - Rating) tumbled between 9% and 14%.

Cuomo is seeking to end the relationship between Wamu and First American, as well as to get penalties and disgorgements from First American and eAppraiseIT.

The blatant action of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market," Cuomo said. "By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion."

This year signs of strain appeared as home prices began falling and subprime borrowers increasingly fell behind on their loans.

Inflating the appraisal value hurts homebuyers by increasing their payments, making them more likely to default.

Shares of First American were up 96 cents to $31.08.

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   AND WE ALL KNOW VIA THE MS FRAUD BATTLE THAT THIS IS NOT THE ONLY RACKETEERING "BOO-BOO" WASH MUTUAL HAS MADE...!!
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arkygirl
Did you know that WaMu is outsourcing...to MEXICO??!! It seems really smart to send vital personal info to a place where there are a lot of people who would like to have American identities, doesn't it? And WaMu has lost around 100,000 loan files...

http://www.click2houston.com/investigates/14450151/detail.html

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O -

WamU, Thats part of Ameriquest right?
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He's right on target!

They were partner's in crime with Litton that stole my deceased family's home and all personal property inside.  Their field inspectors that are investors bid on his home at the auction sale. 
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Digger

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"We have absolutely no incentive to have appraisers inflate home values," WaMu said.


Hmmm, no incentive to INFLATE home values to guarantee tens of thousands more dollars in illegal profits?  Just like servicers ("debt collectors") have no incentive to manufacture defaults to steal homes?
 
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"The complaint filed today by the New York Attorney General against First American and our eAppraiseIT subsidiary has no foundation in fact or law," First American said in a statement.


Is First American saying the New York Attorney General's office is bored and needs something to do? 

The FACT worm lips is this; what you are doing and have been doing for years is ILLEGAL, and the LAW clearly says so.  It is the Attorney General's duty to shut down illegal operations to protect the public from criminals who break the law - and now that you have been caught, you will be held accountable.

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