SAN FRANCISCO (CN) - To suck maximum profits from consumers during the subprime mortgage fiasco, Wells Fargo pressured and intimidated appraisers to violate industry and regulatory standards, blacklisted appraisers who refused, and did this by routing appraisal requests through the appraisal management company Rels Valuation, according to a RICO class action in Federal Court. The class claims, "Wells Fargo and Rels Valuations have caused substantial damage to thousands of appraisers across the United States and have distorted real estate prices in the marketplace."
Named plaintiffs Sound Appraisal and Savage Appraisal accuse Wells Fargo and Valuation Information Technology LLC dba Rels Valuation of racketeering. They claim that "Wells Fargo has embraced a host of practices that victimize consumers and have substantially contributed to the financial woes now plaguing our economy. Wells Fargo imposed excessive fees and high interest rates, utilized deceptive marketing tactics, and steered customers to subprime loans to maximize Wells Fargo's profits. It engaged in loan flipping, selling overpriced insurance, and offered sham open-end loans and credit cards.
"In approximately 2004, instead of dealing with the appraisers directly, Wells Fargo began routing appraisal requests through the appraisal management company Rels Valuation.
"As part of its corporate objective to abandon underwriting standards in order to maximize market share and profits, Wells Fargo and Rels Valuation have together engaged in a practice of pressuring and intimidating appraisers into using appraisal techniques that produce appraisals that meet Wells Fargo's business objectives even if the use of such appraisal techniques is improper and in violation of industry and regulatory standards. If appraisers refuse to play ball as Wells Fargo demands, Wells Fargo, through Rels Valuation, removes the appraiser from the list of approve appraisers, which essentially blacklists the appraiser. Once an appraiser is blacklisted Wells Fargo and Rels Valuation will no longer request appraisals or accept appraisals from these persons and companies. ...
"Defendants' conduct violates, among other laws, the federal Racketeering Influenced and Corrupt Practices Act. Wells Fargo and Rels Valuations have caused substantial damage to thousands of appraisers across the United States and have distorted real estate prices in the marketplace. Therefore, this suit is necessary to stop Wells Fargo and Rels Valuation's unlawful behavior and to compensate appraisers that were subject to Wells Fargo's unlawful scheme."
Plaintiffs are represented by Jeff Friedman with Hagens Berman Sobol Shapiro of Berkeley.
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