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CASE FILE California Class Action

CASE FILE California Class Action

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Published by Foreclosure Fraud

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Categories:Types, Research, Law
Published by: Foreclosure Fraud on May 19, 2012
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Federal district court judge grants class certification in mortgage appraisal suit
May 1 2012The United States District Court for the NorthernDistrict of California granted class certification in amortgage loan appraisal suit alleging defendantsconspired to inflate appraisals to increase the sale of loans in thesecondary market. The Court found that plaintiffs presented sufficient evidence to establish common questions of fact and law, holding thatcommon questions and answers need not uniformly apply to all class members. The Court also found that the analysis of individual appraisalfees would not create individualized issues, but instead would provide additional support for plaintiffs’ claims that an inflated appraisal schemeexisted. Finally, the Court also held that the Real Estate Settlement Procedures Act’s treble damages, attorney’s fees and governmentenforcement mechanisms did not make class action an inferior method of litigation. Clickhere for the opinion.
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| 860 Broadway, 6th Floor | New York, NY 10003 | www.law360.comPhone: +1 646 783 7100 | Fax: +1 646 783 7161 | customerservice@law360.com
Homeowners Win Cert. In WaMu MortgageAppraisal Suit
Lana Birbrair
Law360, New York (April 25, 2012, 10:28 PM ET) -- A California federal judge onWednesdaycertified a class in a suitclaiming Washington Mutual Bank and First American eAppraiseIT conspired to inflate appraisal values so that WaMu could sell securitizedmortgage loans at artificially higher prices.Afterclass certification was denied without prejudicein 2010, U.S. District Judge Ronald M.Whyte on Wednesday granted the class's motion for certification, finding the plaintiffs hadsuccessfully shown the alleged inflation of appraisal values in the aggregate could beestablished by common proof. The judge certified a class of all consumers nationwide whoreceived home loans from WaMu since June 2006 in connection with appraisals obtainedthrough eAppraiseIT."We appreciate the court's ruling, which is thoughtful and well-reasoned," said J. MarkMoore of Spiro Moore LLP, an attorney for the plaintiffs. "Of course, there remains much tobe done in the case, but this is an important step toward justice for the class."The suit, launched in 2008, alleges that beginning in June 2006, WaMu conspired witheAppraiseIT to inflate the appraised value of properties covered by mortgage loans so thebanks could sell the aggregated security interests in those properties at inflated prices, inviolation of the Real Estate Settlement Procedures Act.Although home purchases were traditionally financed through third-party lenders who heldsecurity interests in properties, based on professional appraisals, until their loans wererepaid, banks in recent years began selling loans to other financial institutions rather thanhold on to them, according to the order. This behavior gave banks an incentive to seekhigher appraisals for the mortgaged properties, the suit says.The class accused WaMu of demanding that all appraisals be performed by those on anapproved list and then reserving the contractual right to challenge appraisals by requestinga reconsideration of value, which the bank then used to get eAppraiseIT and LenderService Inc. to increase appraisal values. Lender Service has since been dismissed fromthe suit.WaMu also allegedly asked eAppraiseIT and Lender Service to hire former WaMuemployees as appraisal business managers with the authority to override valuesdetermined by third-party appraisers. The two companies then altered reports to includehigher property values, remove negative references and otherwise comply with the bank'swishes, according to the suit.In certifying the class, Judge Whyte found that the plaintiffs had successfully alleged that a
Page 1of 2Homeowners Win Cert. In WaMu Mortgage Appraisal Suit -Law3604/27/2012http://www.law360.com/articles/334296/print?section=classaction
single, overriding agreement between WaMu and eAppraiseIT existed and had shownenough evidence to infer a conspiracy, despite WaMu's objections that its relationship witheAppraiseIT fluctuated and was at times contentious, creating various circumstances thatwould need to be addressed individually.Representatives for the defendants were not immediately available to commentWednesday.The plaintiffs are represented by J. Mark Moore and Robert Ira Spiro of Spiro Moore LLP,the Law Offices of Janet Lindner Spielberg, Joseph N. Kravec Jr. of Stember FeinsteinDoyle Payne & Kravec LLC, and Michael D. Braun of the Braun Law Group PC.Washington Mutual is represented by Jonathan M. Lloyd, Stephen M. Rummage and MartinL. Fineman of Davis Wright Tremaine LLP. EAppraiseIT is represented by Jeffrey D.Rotenberg, Kerry Ford Cunningham, Carter Winford Ott, David F. Gross, Francesca LeighCicero, Patrick J. Smith and Richard F. Hans of DLA Piper.The case is Spears et al. v. Washington Mutual Inc. et al., case number 5:08-cv-00868, inthe U.S. District Court for the Northern District of California.--Editing by Kat Laskowski.
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Page 2of 2Homeowners Win Cert. In WaMu Mortgage Appraisal Suit -Law3604/27/2012http://www.law360.com/articles/334296/print?section=classaction

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