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FirstAm/Eape investor class action

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Marcia Langley

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Aug 26, 2005
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Certified Residential Appraiser
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Missouri
This starts an investor class action suit against FirstAm/Eape for the reason of inflated appraisals.

I guess those memos are not through causing them trouble yet.

http://money.aol.com/news/articles/_a/grant-and-eisenhofer-issues-notice-of/n20080625182709990032

The Complaint alleges that, during the Class Period, First American and certain of the Company's officers and directors engaged in an illegal scheme with Washington Mutual, Inc. ("WaMu"), whereby the defendants, through First American's real estate subsidiary, eAppraiseIT LLC, prepared artificially inflated appraisals of homes for use in connection with mortgages issued by WaMu. During the Class Period, in quarterly earnings reports, the Company's management reported increased earnings from appraisal fees and reassured investors that internal controls were adequate. The Complaint alleges that First American's fees from the improper appraisals resulted in the Company overstating its gross profit margins and net income during the Class Period and that throughout the Class Period the defendants made false and misleading statements regarding the Company's internal controls and financial performance.
 

Carnivore

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Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Pam needs to call them make arrangements for all the evidence she has.

Grant & Eisenhofer, P.A.
Michael J. Barry
1201 North Market Street
Wilmington, DE 19801
Telephone: 302-622-7000
Fax: 302-622-7100
[email protected]
 

Workbox

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Mar 2, 2005
Professional Status
Certified Residential Appraiser
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Colorado
Carni, I have a feeling that they are ready have. This is just more proof that the appraisal process needs to be in the hands of the appraiser.
 

JonGalt

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Aug 4, 2005
Professional Status
Certified Residential Appraiser
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Illinois
Every borrower who paid a full appraisal fee to the bank and then had the bank place the order through an AMC which in turn paid the actual appraiser pennies on the dollar should file suit as well. Some of these borrowers would be shocked to know that they paid big appraisal fees only to have the lowest fee appraiser do the assignment.

I'm not into lawsuits, but if I paid $500.00 for an appraisal I would expect that the appraiser charged $500.00, not that the bank owned AMC used me and my fee as a cash cow while farming the work to a minimally qualified (at best) appraiser.
 

CANative

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Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Glad to see this in a way.

I don't know how many times over the last few years I told eApe phone monkeys that eApe was going to get sued some day over the way they did business. When I told them what WaMu in Ukiah was doing (having borrowers hold off on setting the appointment until they reported the name of the appraiser to their WaMu loan rep) they just blew me off. Shortly after that incident I posted on the forum that I was sending Pam $100 for her defense fund and within a couple of hours I was locked out of eApeIT's website.
 

Michigan CG

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Pam needs to call them make arrangements for all the evidence she has.

Grant & Eisenhofer, P.A.
Michael J. Barry
1201 North Market Street
Wilmington, DE 19801
Telephone: 302-622-7000
Fax: 302-622-7100
[email protected]

I assume Mr. Meateater that the above is the guy handling the case?

If so, don't you think he would find this interesting?

(having borrowers hold off on setting the appointment until they reported the name of the appraiser to their WaMu loan rep)

And, considering this below....

I'm not into lawsuits, but if I paid $500.00 for an appraisal I would expect that the appraiser charged $500.00, not that the bank owned AMC used me and my fee as a cash cow while farming the work to a minimally qualified (at best) appraiser.

I would think that the class action could be successful. Wouldn't a typical homeowner paying $500 for an appraiser expect the company making the loan to hire the best appraisers vs. the cheapest ones? I would love to be the attorney....

"So why didn't your company use Mr. Joe Appraiser who has 20 years experience in Little Town, NY and instead used a company with trainees doing the reports? Was it because you could pay the trainee company $200 and pocket $300?"
 

Restrain

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Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Fired eAppraiseIt years ago. Good thing we did.
 

Mike Phillips

Senior Member
Joined
Dec 16, 2004
Professional Status
Certified Residential Appraiser
State
Florida
I have news for everyone. One of the big reasons why the type of abuses being discussed in this thread can happen is because the borrower is kept completely out of the loop.

Most appraisers only demonstrate a concern for the borrower when it is useful to make their argument about this or that.

The emphasis on fast and cheap was allowed to happen, by appraisers, and it is a direct result of the acceptance of the notion that it is only the client's needs and/or risk that should be considered/protected. The public trust which includes a significant group - the taxpayers, has been forgotten.

Unfortunately, when we accept that notion, as most appraisers have, it opens to door for the client to determine they don't really need or want a USPAP compliant appraisal - just one that is delivered fast, cheap and hits the number.

And an additional option lenders might have in the future is that they don't need an appraisal at all. Or (screw the borrower, spoken softly) just give me the fastest and least costly alternative you can deliver, a valuation product that hits my number or above is good 'nough. Oh yeah, leave out any negative comments.
 

Bama Bayou

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Joined
Oct 19, 2006
Professional Status
Certified General Appraiser
State
Alabama
I think it's just a matter of supply and demand. If fast, cheap and hitting the number is demanded it will be provided. And it was.

When lenders demand high quality appraisals with reasonable turn times and fees, they will get them.

When the incentives for the lenders to demand quality is greater than the incentives to just make the deal work, this problem will go away for the most part.
 

JoTetherow

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Joined
Nov 29, 2006
Professional Status
Certified Residential Appraiser
State
Nebraska
I think it's just a matter of supply and demand. If fast, cheap and hitting the number is demanded it will be provided. And it was.

When lenders demand high quality appraisals with reasonable turn times and fees, they will get them.

When the incentives for the lenders to demand quality is greater than the incentives to just make the deal work, this problem will go away for the most part.


and how many decades do you predict it will take to get away from the "its all about the money" mind set to "its all about the quality" mind set?

profit before honor is now the mantra of the world it seems. INHO, we will not see a turn to a better society in our lifetime.

jo
 
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