The Federal Deposit Insurance Corp. (FDIC) has accused Lender Processing Services of Jacksonville, Fla., and CoreLogic of Santa Ana, Calif., of causing $283.5 million of damages to the former Washington Mutual for failing to provide oversight of appraisal.

The agency filed a 118-page suit Tuesday against LPS for $154.5 million that said 220 appraisals performed between 2006 and 2008 contained "multiple egregious violations" of industry standards, while less than 4% conformed with professional appraisal standards.

An LPS subsidiary, LSI Appraisal, engaged in improper licensing of appraisers, failed to perform site visits, used improper or unsupported comparisons of properties, failed to take into account declining housing prices and tied compensation or employment to appraisal results, according to the suit.

The FDIC, as the receiver of Washington Mutual, alleges that the losses "were a direct and proximate result" of work done by LPS.

In a filing with the Securities and Exchange Commission (SEC) on Tuesday, LPS responded to the allegations, claiming that other entities provided the full appraisals on 75% of the appraisals reviewed by the FDIC.

LPS said in the filing that it "believes that any loan losses are not because of appraisal issues, but are due to the quality of underwriting by Wamu, borrowers defaulting and the weakness of the economy after the loans were made, among other factors."

The FDIC filed a separate suit Tuesday that seeks $129 million from CoreLogic, claiming it found negligence in Corelogic's eAppraiseIT unit after a review of 194 appraisals performed in 2006 and 2007.

CoreLogic said in an SEC filing that 85% of the loans cited by the FDIC involved "desk reviews" that do not require an interior or exterior inspection by the reviewer, and that desk reviews "are more limited in scope than full appraisals."

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