A Californian real-estate appraiser is suing Washington Mutual, saying she was blackballed after refusing to to give artificially inflated property value estimates.

…last May, according to the suit, a WaMu manager upbraided her for describing local property values as “declining” in an appraisal. The manager insisted that Wertz “change her report to indicate ‘stable’ conditions so that the loan could be approved.”

All the relevant data suggested otherwise, Wertz said, and she refused. The manager then allegedly told Wertz that she would be banned from all further assignments from Washington Mutual if she did not cooperate. Wertz declined to do so — citing federal and state regulations and professional ethics requiring her to provide only objective and accurate reports free of outside influence. According to the suit, Wertz was then cut off from any additional WaMu business through the appraisal management companies.

Fudged home value numbers were a contributing factor in the subprime mortgage meltdown. One boosted house was used as the basis for the selling price of the next house, which might then get another boost. That property values “would always go up” was used to hook people into bad loans (“you can always refinance!” was the refrain). The unwinding of the subprime mortgage market is fascinating to watch. It’s like a Jenga tower made entirely out of crooks.

Appraiser: Enough’s enough [Los Angeles Times] (Thanks to Paul!)

(Photo: Ecnerwal)

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