Appraisers Say WaMu Cut Corners to Increase Its Mortgage Business

Seattle Times (04/15/08); Kelleher, Susan
Graham Albertini, a former Washington Mutual (WaMu) appraiser, says the lender eliminated many of its appraisal safeguards when the housing market took off in 2001 in an effort to bolster market share. When he was hired in 1999, Albertini says the appraisal process involved an on-site inspection, a drive-by of comparable properties and a cursory review before the underwriting department would see the loan. However, he says WaMu replaced the cursory review a couple of years later with automated valuation software and began offering incentives to close deals; Michael Evans of the American Society of Appraisers notes that some lenders relied on such software alone. Albertini adds that appraiser comments about unfinished remodeling and other conditions impacting property values were eliminated due to computer errors, and some appraisers discovered they would be compensated faster if they indicated that a home was being sold "as is" and set a market value above the requested loan amount. WaMu already has been accused of selecting appraisers willing to inflate property values to close deals in a lawsuit filed by New York Attorney General Andrew Cuomo against e-AppraiselIT; both WaMu and the appraisal firm deny wrongdoing.