FDIC Files Two Lawsuits Alleging Appraisal Fraud

On May 29, 2011, the FDIC, as receiver for Washington Mutual Bank (“WaMu”), filed complaints in the U.S. District Court for the Central District of California against two appraisal firms alleging negligence, breach of representations and warranties, and breach of contract. The complaints, filed against CoreLogic Valuation Services (formerly eAppraiseIT, LLC) and LSI Appraisal, LLC, allege that these firms provided WaMu with substantially inflated appraisal values, which induced WaMu to make mortgage loans it would not otherwise have made. The FDIC seeks at least $129 million from CoreLogic and $154 million from LSI. CoreLogic Complaint. LSI Complaint.