New York Attorney General Andrew Cuomo has filed a lawsuit against First American eAppraiseIT and First American Corp., claiming that in an effort to keep the business of lender Washington Mutual (WaMu), eAppraiseIT agreed to use appraisers that were specifically pre-approved by WaMu and guilty of inflating prices.
In a press release, the state’s attorney general accuses First American and its appraisal subsidiary of using a list of preferred “Proven Appraisers” supplied to them by Washington Mutual instead of hiring independent property appraisers.
Cuomo said in his announcement, “The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike.”

Cuomo added, “The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crises and turmoil in the housing market. By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crises in motion.”
Cuomo’s complaint goes on to claim that WaMu became one of eAppraiseIT’s largest clients and benefitted financially from the higher appraisals. He also quoted excerpts from internal e-mails that allegedly prove eAppraiseIT executives knew their actions were unethical. In one e-mail, an eAppraiseIT president told senior executives at First American: “we have agreed to roll over and just do it … “
First American responded to the allegations by saying the claim “has no foundation in fact or law.” The company’s leadership also says the e-mails mentioned in the lawsuit were taken out of context and mischaracterized by the Attorney General’s office.
“The program called into question today by the Attorney General has been vetted and approved by the federal regulator responsible for oversight of such programs,” a statement from First American read. “We welcome the opportunity to now present all the facts before an impartial third party. In that presentation, we will demonstrate the appropriateness of our appraisal practices in the state of New York, and we will vigorously defend the reputation of Washington Mutual and the reputation we have labored more than 100 years to build.”
Click here to read Andrew Cuomo’s full press release, which includes other excerpts from internal eAppraiseIT e-mails.