NY, FirstAM & WaMu article

[Workbox]

Finiti, is I believe, as well, some sort of "child" or niece, nephew, cousin, etc. of Epraiseit...

Its all very convenient and interesting that Cumo isn't going after WAMU for supposedly, lack of jurisdiction, or is was it, of evidence ala smoking gun. I have always marveled at the insulation provided to the lender as they use a 3rd party intermediary to do their nasty work. Kinda like what a pimp does.

Wamu gets to feing ingnorance and shock at the situation. Drops epraize it and moves to the next AMC? Joey.....must be so excited!!

It's all about timing. Listen to the silence as I have forcasted many times. (Search "Listen to the silence " mark "show post")

 

[Jonsey]

I love how the AMC's markets themselves as "an extra layer of insulation to protect the bank".

Class action suits may follow. But, its actually the other way around.....so to speak. Lenders like WAMU are not stupid. AMC's will take the hit for the lenders as part of the food chain. Your statement as to the AMC's market mantra about adding the extra layer it rather ironic, if not downright poetic justice. AMC's do insulate the lenders from OTC and regulators, and banks know this. It will be anything short of a miracle if just one email directly implicating WAMU is discovered.

 

[Carnivore]

It will be anything short of a miracle if just one email directly implicating WAMU is discovered.

6/7/07 WaMu First Vice President to eAppraiseIT and LSI
“Name change from “proven appraiser” and/or use of the moniker “PAL” list is discontinued, under the direction of the WaMu legal department. We are utilizing a more generic term acceptable w/in regulatory guidelines and industry standards.”

 

[hastalavista]

AMC's do insulate the lenders from OTC and regulators, and banks know this.

I disagree with this comment.
FRI means Federally Regulated Institutions. Wamu is an FRI. They are not insulated at all by any third-party vendor in regard to what requirements Wamu must follow nor can they "outsource" their responsibility to perform necessary due diligence.

 

[Katalin Farkas]

CENTER

Cuomo: Subprime loans deliberately inflated
New York's attorney general accuses First American and Washington Mutual of using appraisers to overstate the value of home loans.
November 1 2007: 4:47 PM EDT

ALBANY, N.Y. (AP) -- New York Attorney General Andrew Cuomo said Thursday a major real estate appraisal company colluded with the nation's largest savings and loan companies to inflate the values of homes nationwide, contributing to the subprime mortgage crisis.

[Copyrighted article without a link was removed]

 

[Mike Phillips]

Being an appraiser who has done a lot of work for LSI/WAMU, I have no fear of my name being found on a list of any kind. My appraisals speak for themselves and if any one wants to review them, have at them. I;m not saying that all are perfect but you'll have a hell of a time proving fraud, number hitting or intentional malfeasance. Sure there maybe a comma out of place, and address transposed and a misspelling occasionally but nothing even remotely intentional approaching fraud.
When I read about the fear that is evident on this board about being reviewed, I wonder. Actually I don't wonder. I do a lot of review work. I have 15 years of experience and have been a certified appraiser for the last 10 years. Of the appraisals that I review, 10% are outstanding appraisals, 25% are good appraisals and another 15% are passable but unfortunately the most predominant work I see is pure unadulterated crap. I could regale you with stories about neighborhood boundaries that if you read them closely include the entire county or a city of 180,000. Appraisals without even so much as one page of addenda. Milllion dollar properties being described as standard. Some appraisers wouln't know market data if it stared them in the face. I just reviewed an appraisal of a $7 millon property (new construction) without a cost approach. Excuse that was given that there were no comparable land sales.
I can understand why these appraisers are afraid of being reviewed. They would instantaneously lose their license if state boards were up to par and they need to lose their license.
I believe that the state boards have the right to see your workfile anytime. I believe that includes visiting your office and asking to see it on the spot.

I am all for the state boards getting proactive instead of reactive.

Another thought, maybe the appraisal profession should look at civil engineers, surveyors and accountants and their licensing procedures

Hey Dutch -

Lots of good information above, especially the last line. Few remember one of the chief arguments for certification was that appraissing could "one day become a true profession like public accounting." Needless to say, IMO, the powers that be have probably not even glanced at the standards for other professions in a long time.

Of course, your comments in Paragraph 1 could be put to bed pretty easily. All that is necessary is to compare orders and lender/borrower estimates of value with the opinions of value on the appraisals. Then ask who no longer receives work and why; then compare the stats for the first group with the second. No one has to prove fraud. This is not about appraisal standards or appraisal fraud - it is about a breach of fiduciary responsibility and about bias, maybe conspiracy to circumvent banking regulations. Given sufficient data I believe one could test a hypothesis about bias (statistically) fairly easily.

With all the money "e" has earned, they certainly haven't proteced themselves very well, IMO with expert advice and legal counsel.

Another thing, I notice lots of comments from appraisers in Washington and Oregon. Souds like your market is in much better shape compared to areas like mine. That could explain the differences in "pressure" from one market to another.

 

[Carnivore]

Did you all see this in the complaint!!

26. Initially, eAppraiseIT employed a combination of in-house staff and third-party
fee appraisers, including some “preferred appraisers” identified by WaMu, to conduct appraisals
of residential property for WaMu. eAppraiseIT also hired approximately 50 former WaMu
employees as staff appraisers and Appraisal Business Managers (“ABMs”) and – at WaMu’s
request – gave the ABMs the authority to override and revise the values reached by third-party
appraisers.


. . . the four appraisers/reviewers would be directly involved in
escalations dealing with: ROVs, Valuation issues where the purchase
price and appraised value differ with no reconciliations/justifications
by the appraiser, Value cuts which we continue to receive from your
third party reviewers (Wholesale), proactively making a decision to
override and correct the third party appraiser’s value or
reviewer’s value cut, when considered appropriate and supported . . .

This is shocking!!! I am outraged over this deliberate altering of documents!!


Want to see how to catch the crooked appraisers!!

Sales is the driving force behind the Proven Appraiser List (PAL)
which is questionable from regulatory perspective. We are required to
use these appraisers at 80/20% fee splits. This is dilutive to our P&L.
Even with the implementation of such, we are still finding that we are
being questioned surrounding what appraiser was assigned the order.
We feel our reputation in the industry is being tarnished by the

 

[hastalavista]

Did you all see this in the complaint!!

26. Initially, eAppraiseIT employed a combination of in-house staff and third-party
fee appraisers, including some “preferred appraisers” identified by WaMu, to conduct appraisals
of residential property for WaMu. eAppraiseIT also hired approximately 50 former WaMu
employees as staff appraisers and Appraisal Business Managers (“ABMs”) and – at WaMu’s
request – gave the ABMs the authority to override and revise the values reached by third-party
appraisers.


. . . the four appraisers/reviewers would be directly involved in
escalations dealing with: ROVs, Valuation issues where the purchase
price and appraised value differ with no reconciliations/justifications
by the appraiser, Value cuts which we continue to receive from your
third party reviewers (Wholesale), proactively making a decision to
override and correct the third party appraiser’s value or
reviewer’s value cut, when considered appropriate and supported . . .

This is shocking!!! I am outraged over this deliberate altering of documents!!


Want to see how to catch the crooked appraisers!!

Sales is the driving force behind the Proven Appraiser List (PAL)
which is questionable from regulatory perspective. We are required to
use these appraisers at 80/20% fee splits. This is dilutive to our P&L.
Even with the implementation of such, we are still finding that we are
being questioned surrounding what appraiser was assigned the order.
We feel our reputation in the industry is being tarnished by the

A-

You may be correct (and I have not read the entire document), but since you have, I'll ask you: Does it specifically say that reoprts were altered, or does it imply that was the case?
Just reading what you posted, it could be interpreted that a submitted appraisal is reviewed and the ABM comes back with a higher value. This doesn't change the original appraisal, it just creates another opinion of value that, in this case, is higher and that the decide to lend with.

The distinction between the two is significant.
If I understand your conclusion, you interpret the statement to mean that the ABM changed the original appraisal and submitted it as if it were unaltered. Is that the case?

Thanks

 

[Renee Healion]

If no one outside of here understands what we have been complaining to each other about for so long, then this Complaint makes it perfectly clear. Read it!

 

[hastalavista]

If no one outside of here understands what we have been complaining to each other about for so long, then this Complaint makes it perfectly clear. Read it!

Renee-

I'm not sure your comment was directed toward me, but I took your good advice and read the entire complaint- all 31 pages. :new_smile-l:

Item #89 indicates that values were increased in review, not as a result of altering an original report. This doesn't mean reports were not altered- it means that altered reports are not a part of this initial complaint.

Now that I've read the entire complaint, I've concluded the following:
Succumbing to client pressure is scalable. You can be the lone-appraiser in your neighborhood or part of a multi-billion dollar conglomerate. There is no difference in the application of pressure; the difference is its scale. And, the last defense is for the appraiser to say no.
Likewise, unethical behavior on the mortgage side is scalable too- it appears that whether one is a mortgage broker at small-town mortgage office or one of the largest lenders in the country, competition to meet production quotas creates pressure which, uncontrolled and unmonitored, can result in unethical practices.

As bad as EappraiseIT looks in this complaint (and they look bad), Wamu looks worse. Wamu failed to ensure the separation between loan production and appraisal production. That wasn't EappraiseIT's responsibility, but Wamu's. EappraiseIT's responsibility was not to "roll over"; in that they failed.