Jennifer Wertz, a California Office of Real Estate Appraisers (OREA) licensed real estate appraiser, has filed a 12 count lawsuit against Washington Mutual Bank, First American Corp., eAppraiseIT, Lenders Services (LSI), FNIS, Inc, and Susan Richter.
I've abstrated and edited portions of the lawsuit for ease of reading on this blog. The complete, un-edited document, can be downloaded here: Download WertzPrimarySuit.pdf
Thanks to Pamela Crowley of http://www.MortgageFraudWatchlist.org for the tip!
- 1/17/08: Money Magazine: WaMu Accused Of Appraisal Fraud
- 1/22/08: WaMu Continues To Take Its Lumps on Appraisal Practices
According to the lawsuit, Jennifer Wertz, beginning in 2001, began providing real estate appraisals to WAMU. Jennifer was receiving approximately two to three appraisal orders each day and earned in excess of $100,000 a year from WAMU.
In or about July 2006, WAMU began to outsource the management of their appraisal services to national appraisal management companies. WAMU began outsourcing their appraisal work through LSI and eAppraiselT and Jennifer Wertz accepted their offers of to provide appraisals for WAMU and others, through LSI and eAppraiseIT.
Exhibit 1 of the law suit includes the LSI Independent Contractor Agreement signed by Jeniffer Wertz. Typical of AMC contracts, it contains a hold harmles clause, which causes me to wonder how THAT will come into play?
Jennifer Wertz was considered a preferred real estate vendor which means that Wertz's worked had previously been used and WAMU was familiar with and considered Plaintiff's work to be proven.
Jennifer continued to do real estate appraisals for WAMU through LSI until on or about August 2007 when LSI and WAMU terminated Jennifer Wertz's contract.
According to the suit, Wertz did appraisal reports for WAMU directly, or for WAMU through LSI, for a period of six years. Throughout the six-year period, Jennifer's appraisal reports always met or exceeded industry standards, as well as WAMU standards.
On or about May 21, 2007, Susan Richter (a Sales Manager employed by WAMU) informed Jennifer Wertz that a loan for which Wertz had prepared an appraisal report had been declined because Wertz had indicated in her report "declining" market conditions. Richter insisted that Wertz change her appraisal report to indicate "stable" market conditions so that the loan could be approved.
Susan Richter, however did not provide any evidence to contradict Jennifer Wertz's opinion and the facts supposing the decline of market conditions. Susan Richter then told Wertz that if she did not change the appraisal report, that, she (Susan Richter) would have Wertz blocked or prevented from doing any WAMU appraisal work.
Shortly after the conversation with Susan Richter, Wertz contacted LSI and reported that Richter had insisted that she change an appraisal report to reflect stable market conditions when in fact stable market conditions did not exist.
Jennifer told an LSI representative that Susan Richter had also told her that if she did not change her appraisal report, then she would be prevented from doing any WAMU appraisal work.
Wertz also informed the LSI representative that she believed that direct contact from Susan Richter violated several laws, regulations and policies related to an appraiser's independence from influence by anyone, including the entity writing the loan, in this instance WAMU.
On or about June 18, 2007, LSI informed Jennifer Wertz that she had been blocked by WAMU, that WAMU would not give her any more appraiser work because of two of her appraisal reports. These reports were prepared in compliance with the Uniform Standards of Professional Appraisal Practice (hereinafter"USPAP"), and state and federal laws and regulations; and are to be independent of influence by any third parties, including LSI and WAMU.
According to WAMU, two loans were denied because the appraisal reports prepared by Jennifer Wertz for the loans contained accurate and true information of a market decline, as opposed to including false and deceptive information in the appraisal reports, specifically that the market was stable. Because of Jennifer Wertz's reports, WAMU demanded that LSI and eAppraiselT not use Wertz to do any more appraisals.
According to the lawsuit, WAMU prevented Plaintiff from earning a living as an appraiser because she would not commit fraud and violate federal and state laws including the law to remain independent in preparing hei appraisals.
Jennifer Wertz refers to and incorporates by reference the Complaint filed by the People of the State of New York against First American Corporation and First American eAppraisal, (Complaint Number 07-10397, United States District Court, Southern District of New York)
COMPLAINT FOR DAMAGES AND DEMAND FOR JURY TRIAL BASED UPON:
1. BREACH OF WRITTEN CONTRACT
2. BREACH OF ORAL CONTRACT
3. BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING
4. INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC GAIN
S. TORTIOUS INTERFERENCE WITH CONTRACT
9. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
I0. NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS
11. CIVIL, CONSPIRACY
12. DECLARATORY RELIEF
Do YOU have a similar story? Stephen Danz would like to hear it!
Danz & Gerber
Stephen F. Danz SBN, Attorney for plaintiff, Jeniffer Wertz
13418 Ventura Blvd.,
Sherman Oaks, CA. 91423
Telephone: 877-525-0700 (toll free).