WaMu Really Blew It

NEW YORK (Money) -- A former real estate appraiser for Washington Mutual is suing the bank, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy.

Jeniffer Wertz, who is seeking unspecified damages, says WaMu stopped accepting her appraisals in mid-2007 a month after she reported that her local housing market in California was "declining."

A pessimistic outlook makes it harder to extend outsized, risky mortgages to borrowers whose homes can't support them. But Wertz's assessment shouldn't have been controversial at the time. According to the National Association of Realtors, home prices in her hometown of Sacramento fell $9,000, or 2.5 percent, to $356,500 in the second quarter of 2007. And most economists were already characterizing the housing market as a bubble that was ready to burst.

I am keeping this article to the short version as to add my own testament. In 2006
I ran into the worse case of Mortgage Fraud I have ever encountered anywhere and it
was done internally by a WaMu retail loan officer. I had a client foreclosing on there home and were able to sell it to a trusted investor (So they thought)It turns out this investor had a relationship with a a WaMu Loan officer, Branch Manager and underwriter. Soon after the purchase of the home at 100% financing. The so called investor was able to pull strings through WaMu to get a completely fake appraisal to go through valuing the same property at about a 70% higher value. Since the new loan not yet showed on the "Investors" credit, but did show up on a county title search the loan officer had him write a letter saying he owned that property "Free and Clear." Soon after that Wamu funded the investor a $200,000 line of credit which was gone quite soon. In the end the investor foreclosed and got away with hundreds of thousand of dollars. After finding out what exactly had happened I called the office in L.A. to speak to the Branch Manager. I actually got through to her and she claimed to know nothing of my accusation. Interestingly enough it was moments later I received a call on my personal cell phone from the hero of our story, the Wamu loan officer himself who in a very threatening tone told me "If you know what is good for you and your family you will drop this subject and never call anyone again." OK mister mafioso you got it. I immediately went to the Downtown Sacramento WaMu building off of Arden to tell the Regional V.P. of my experience. I sat around got the cold shoulder from several gate keepers until finally I received a business card with an invitation to make an appointment. I was extremely vigilant leaving messages with and for the area V.P. for several weeks. After being ignored for nearly a month, sitting back and examining the situation, I stopped the badgering.

On a personal note the only peace of mind I ever got was short selling there stock.

-Christopher Rockey