- 149 -
insurers gave advance approval to the specific loans at
issue in these cases or to any other loans but only that
the private mortgage insurers knew that EPIC valued the
properties on a retail basis.
Respondent argues that we should disregard the actions
of the private mortgage insurers and secondary lenders on
the ground that there is no evidence that the mortgage
insurers and secondary lenders performed due diligence.
Respondent argues that they "ignored or did not understand
the realities of the EPIC transactions." We disagree.
While the record does not show what due diligence was
conducted by or on behalf of the secondary lenders,
Dr. Hewitt's testimony and the material submitted with
Dr. Hewitt's report confirm that the private mortgage
insurers conducted due diligence with respect to the EPIC
loans, including risk assessments, spot appraisals, and
other forms of due diligence and, in fact, two companies,
MGIC and CMAC, ceased insuring EPIC loans after spot
appraisals disclosed values that were lower than the values
shown on the EPIC's appraisals.
Page: Previous 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 NextLast modified: May 25, 2011