Fraud case against Flagstar Bank dismissed on a technicality
Xpress Appraisal Group sued Flagstar, claiming that Flagstar employees had fraudulently altered an Xpress real estate appraisal and then shared it with Chase Bank. Xpress had appraised the subject property at 1.2 million dollars, which was inadequate to support the contemplated loan. Someone at Flagstar then revised the appraised value up to 1.6 million in an attempt to qualify the property. When Chase discovered the fraud, it removed Xpress from its list of approved appraisers, causing substantial financial loss to the appraisers. Xpress sued Flagstar for damages. The court held that since Flagstar did not expressly approve of its employees' fraudulent activity, Xpress could not pursue a claim against Flagstar.