California Real Estate Fraud Report

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Washington Mutual, Goldman Sachs Settles Securities Fraud Lawsuit for $208.5 Million

Defunct subprime lender Washington Mutual, aka WaMu, and several of its business partners have agreed to settle a class-action lawsuit by pension plans and investors, who accused them of securities fraud.

The settlement agreement requires Washington Mutual to pay $105 million; Goldman, Sachs & Co. and a group of underwriters  to pay $85 million; and Deloitte & Touche to an additional $18.5 million. 

The largest loser was the (Canada) Ontario Teachers’ Pension Plan Board, claiming to have suffered $24 million in losses. The remaining plaintiffs were smaller pensions, investor groups and individuals. Their lawsuit accused WaMu and its executives of securities fraud by filing false financial reports and painting an unrealistic picture of its underwriting standards.

The U.S. seized WaMu in 2008 and sold its assets to JP Morgan Chase for $1.9 billion. 

Earlier articles in the California Real Estate Fraud Report reported accusations that former Washington Mutual employees pressured appraisers to overvalue properties (appraisal fraud, real estate fraud) and push well-qualified loan borrowers into more profitable subprime loans (mortgage fraud) that were unnecessarily costly to those consumers.

Read the original article in the Los Angeles Times.

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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