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Saturday, January 19, 2008

WaMu accused of fraud: lender told appraiser to produce higher property prices

January 19 2008
Lawsuit claims the lender told an appraiser to offer a rosier housing outlook so risky mortgages could get approved. A former real estate appraiser for Washington Mutual is suing the bank, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy. The appraiser, who is seeking unspecified damages, says WaMu stopped accepting her appraisals in mid-2007 a month after she reported that her local housing market in California was declining. She was told to change her appraisal process to produce higher prices for the properties she was evaluating. A pessimistic outlook makes it harder to extend outsized, risky mortgages to borrowers whose homes can't support them.

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