Industry News

New York pushing Fannie, Freddie to make new rules for lenders

Agreement aimed at preserving independence of appraisers

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Fannie Mae and Freddie Mac are reportedly nearing agreement on a deal with New York's attorney general that would require lenders to hire independent appraisers and provide copies of appraisal documents to a clearinghouse where their conduct and activity would be monitored. New York Attorney General Andrew Cuomo's office is investigating whether investment banks and other companies that sold securities backed by mortgage loans failed to disclose to investors and rating agencies that many loans did not meet minimum underwriting standards. The investigation made headlines on Nov. 1, when Cuomo's office announced a lawsuit against First American Corp. and its subsidiary eAppraiseIT, accusing the companies of providing inflated property appraisals under pressure from Washington Mutual. WaMu was not named in the suit, and all three companies have denied wrongdoing. A week later, the attorney general subpoenaed government-chartered mortgage repurchasers Fannie Mae and Freddie M...