Industry NewsMortgage

New York expands appraisal probe to Fannie, Freddie

Attorney General Cuomo announces subpoenas

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New York's attorney general, who last week launched a lawsuit against First American Corp. and a subsidiary charging appraisal inflation, today announced an expanded investigation and subpoenas for mortgage entities Freddie Mac and Fannie Mae seeking details about loans they purchased from banks and information about appraisal practices. The subpoenas announced by Attorney General Andrew M. Cuomo seek information on the mortgage loans Fannie Mae and Freddie Mac purchased from banks, including Washington Mutual, and mortgage-backed securities associated with those loans. The lawsuit filed last week charges that First American and subsidiary eAppraiseIT caved into pressure from Washington Mutual to use a list of preferred appraisers who inflated property appraisals, though First American said in a statement that the lawsuit "has no foundation in fact or law." Cuomo said in a statement today that government-sponsored entities Fannie Mae and Freddie Mac have agreed to his office's demand t...