Washington Mutual and eAppraiseIT are under investigation by Fannie Mae and Freddie Mac due to prodding by New York State Attorney Andrew Cuomo for allegedly pressuring appraisers to inflate value on properties.
At an investor conference in New York, WaMu said the outlook for the mortgage industry next year is bleaker than many believe, while shares of WaMu and other mortgage companies drop even further.
WaMu shares are down 56% this year and at their lowest point in more than seven years. WaMu, the country's biggest savings and loan, was the 6th largest US home mortgage lender in this year's first nine months.
Mr. Cuomo directed Fannie and Freddie to appoint examiners to look particularly at mortgages acquired from WaMu and any other loans made on the basis of appraisals by First American Corp.'s eAppraiseIT LLC subsidiary. Last week, his office filed a lawsuit against First American, alleging it violated federal and state laws by allowing WaMu to control the selection of appraisers hired to assess collateral for loans.
First American said last week the suit "has no foundation in fact or law."
WaMu said it will continue to ensure its operations comply with all applicable laws. WaMu also said both Freddie and Fannie have confirmed that they are continuing to purchase loans from WaMu "in accordance with their existing contracts."
Mr. Cuomo's staff isn't just looking at WaMu loans. He believes pressure on appraisers and inflated appraisals appear to be a very widespread problem in the industry.
Fannie Mae and Freddie Mac said they will both cooperate with the investigation.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment