Lawsuit Filed Against Florida Real Estate Appraisers for Allegedly Inflating Appraisal Values
Dozens of real estate appraisers in Florida are being accused of allegedly inflating appraisal values in the lawsuits filed by the Federal Deposit Insurance Corp against two of the country’s biggest appraisal management companies.
Out of the 89 Florida appraisers mentioned in the California-based lawsuits, 35 have already appeared for disciplinary actions before the Florida Real Estate Appraisal Board.
Acting as a receiver for the Washington Mutual Bank, the federal agency filed the cases last month against LSI Appraisal, a subsidiary of Lender Processing Services based in Jacksonville, and eAppraiseIT, which is a subsidiary of CoreLogic based in California.
Over 500,000 valuations were handled for the bank by the two firms.
The two companies are charged of hiring unqualified appraisers who overinflated the property valuations during the housing boom. According to the brief of the lawsuit, a total of $284 million on faulty mortgages linked to the appraisals were lost by Washington Mutual. Both of the appraisal firms are fighting the charges made against them.
Washington Mutual, America’s biggest savings and loan association entity, crumbled financially in September of 2008 and became the biggest bank failure in the nation.
The former chairman of the Florida Real Estate Appraisal Board, Frank Gregoire, said that the claims in the lawsuits look a lot like the complaints filed against appraisers who were penalized by the board during his 8-year stint as chairman.
According to Gregoire, appraisal companies usually assign work to inexperienced appraisers who reside between 50 and 200 miles from any of the given assignments. It would seem to appear that the appraisal firms are more concerned about maximizing their fees. “If they consider quality, it’s way down on the list. They want it done quickly,” said Gregoire.