FDIC Filing MBS Lawsuits Based on Appraisal Defects as Determined by AVMs
By Peter Christensen
Excerpt:
The FDIC’s complaint in this case is virtually identical to the dozens of other MBS complaints against mortgage originators and aggregators filed by pension funds, insurance companies, banks and other MBS investors. The newsworthy point here is that the FDIC is deciding to join in this litigation boondoggle and is doing it exactly in the same way as many “civilian” MBS investor plaintiffs.
For the appraisal industry, it’s also worth observing that the FDIC is using the same retrospective AVM model as the other MBS plaintiffs to claim the appraisals at issue were flawed and failed to comply with USPAP.
More diffusion and misdirection of accountability. AVMs are notoriously inaccurate on anything oither than “cookie cutter” tracts less than ten years old, so basing litigation on that form of analysis is simply economic terrorism.