Industry News

Wall Street firms queried in New York mortgage probe

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New York Attorney General Andrew Cuomo has reportedly subpoenaed Wall Street firms that securitized risky mortgages during the housing boom, as part of an ongoing investigation of lending practices. Cuomo's office has issued subpoenas to Merrill Lynch & Co, Bear Stearns, Deutsche Bank AG and other firms involved in packaging mortgage loans into securities for sale to investors, Reuters reports, citing a Wall Street Journal story that quoted unnamed sources. The New York attorney general's office has been conducting a ten-month investigation of the mortgage industry, which is focused on appraisals and the packaging of loans into mortgage-backed securities (MBS) for sale to investors. On Nov. 1, Cuomo's office announced a lawsuit against First American Corp. and its subsidiary eAppraiseIT, accusing the companies of providing inflated property appraisals at the behest of Washington Mutual. The lawsuit claims the companies bowed to pressure from WaMu to use a list of pref...