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WaMu Says Cooperating with SEC on Home Appraisals
December 21, 2007 / 2:23 AM / 10 years ago

WaMu Says Cooperating with SEC on Home Appraisals

NEW YORK (Reuters) - Washington Mutual Inc (WM.N) said on Thursday it is cooperating with a U.S. Securities and Exchange Commission inquiry into the handling and reporting of mortgage loans that may have been based on inflated home appraisals.

“We are voluntarily and fully cooperating with the SEC’s inquiry as well as the (Office of Thrift Supervision), and look forward to bringing the facts to both the regulators and public,” Washington Mutual spokeswoman Elizabeth Borrelli said in an e-mail to Reuters.

“After spending a month and a half investigating these allegations, we can say with confidence that there has been no systematic effort by WaMu to inflate home appraisals. We take these allegations very seriously.”

The company’s comments follow a report in The Wall Street Journal on Thursday that the SEC is investigating whether Washington Mutual accurately disclosed to investors of mortgage-backed securities how its loans were appraised.

The SEC is also looking into whether the company, one of the largest U.S. mortgage lenders, properly accounted for its loans in financial disclosures to investors, according to the Journal, which cited people familiar with the situation.

SEC spokesman John Heine said he could neither confirm nor deny an investigation.

Last month, New York Attorney General Andrew Cuomo said his office is examining whether Washington Mutual pressured a big title insurer to inflate home values in appraisals, making it possible for borrowers to obtain mortgages they couldn’t otherwise afford.

Washington Mutual said last week it would slash its dividend by almost three-quarters, cut 3,150 jobs and raise $2.5 billion in new capital as it sees losses from mortgages increasing through 2008.

Its shares rose 25 cents, or 1.7 percent, to close at $14.67 on the New York Stock Exchange on Thursday.

Reporting by Nick Zieminski, editing by Gary Hill

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