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SEC Probes WaMu Home Loans

Investigators focus on charges that appraisals were inflated

By Peter Fearon,  Newser Staff

Posted Dec 21, 2007 4:06 AM CST
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(Newser) – Washington Mutual, one of America's largest mortgage lenders and the biggest savings and loan in the nation, is under investigation by the Securities and Exchange Commission, reports the Wall Street Journal. Regulators suspect some WaMu mortgages were based on inflated appraisals. WaMu, bloodied by the subprime mortgage crisis, lost $348 million on home loans in the third quarter.

The investigation follows a lawsuit by New York Attorney General Andrew Cuomo alleging the bank pressured an appraisal company to inflate home valuations. "We are voluntarily and fully cooperating with the SEC inquiry," said a bank spokesman. "There has been no systematic effort by WaMu to inflate home appraisals."

New York Attorney General Andrew Cuomo speaks to the media at his office, Wednesday, Nov.7, 2007, in New York. Cuomo said that he has issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry....
New York Attorney General Andrew Cuomo speaks to the media at his office, Wednesday, Nov.7, 2007, in New York. Cuomo said that he has issued subpoenas to government-sponsored lenders Fannie Mae and Freddie...   (Associated Press)
The SEC is investigating how Washington Mutual handled mortgage loans that may have been based on inflated property appraisals (AP Photo/Eric Risberg, file)
The SEC is investigating how Washington Mutual handled mortgage loans that may have been based on inflated property appraisals (AP Photo/Eric Risberg, file)   (Associated Press)
Washington Mutual Inc. Chairman and Chief Executive Officer Kerry Killinger speaks during a forum on housing, Monday, Dec. 3, 2007, at the National Press Club in Washington. The SEC is investigating the bank's handling of mortgages which may have been based in inflated appraisals. (AP Photo/Manuel Balce Ceneta)
Washington Mutual Inc. Chairman and Chief Executive Officer Kerry Killinger speaks during a forum on housing, Monday, Dec. 3, 2007, at the National Press Club in Washington. The SEC is investigating the...   (Associated Press)
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WaMu Probe

NY says appraiser inflated values under pressure
New York Times

Washington Mutual cuts 3,000 jobs
New York Times

Washington Mutual probed by SEC
Seattle Times

SEC opens WaMu inquiry
Seattle Post-Intelligencer

 
subprime mortgages • SEC • Freddie Mac • Andrew Cuomo • Fannie Mae • Washington Mutual • WaMu • Office of Thrift Supervision • First American Corp • appraisals • eAppraiseIT

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